EE's 4G subscribers leaped by almost half a million during the summer, although the operator lost almost three quarters of a million customers during the past 12 months.
The UK's largest operator announced its results for the three months to 30 September this morning, with 4G customers up to almost 1.2m, an increase of 72% or 493,000 on the previous quarter. The operator said 4G customers are spending up to 10% more revenue than its average 3G customers.
However, changes to mobile termination rates and the effects of roaming regulations continue to hit it. Service revenue was down 3.3% to £1.45bn, an improvement on the second quarter dip of 4.4%. Excluding regulation, service revenue was down 0.6%. Average revenue per user increased by 3.3% on 2012 but 0.5% with the effects of regulation factored in.
EE said the increase in ARPU was driven by a growth in contract customers, with net adds of 181,000. Its contract base is up 5.7% higher than in 2012 and churn improved by a tenth of a percentage point to 1.1%. It said postpay customers account for 56% of its base and they deliver six times ARPU compared to prepay. Pay as you go continued its decline, with the operator losing 345,000 customers. During the past year, EE's customer numbers declined by 747,000 (2.7% of its base), with prepay falling by 14.3% and contract increasing by 5.7%.
The operator's shift towards contract customers buying smartphones led its data revenues to increase 12 percentage points to 43% of ARPU. It said almost two third (64%) of new or renewing contract customers opt for a 4G contract, up eight percentage points on the previous quarter. The operator said 85% of its contract base now have a smartphone.
Elsewhere, the operator said it has signed up more than 3,200 companies to use 4G including Canon, Expedia and Kimberly-Clark. It recently signed MVNO deals with Virgin Media, Asda Mobile and, pending a final contract, an agreement to run BT's MVNO.
Neal Milsom, chief financial officer for EE, said: 'Consumers and businesses across the UK are recognising that EE has the best network for the smartphone era, with more superfast 4G coverage than all the other networks combined. We attracted half million 4G customers in the quarter and large companies including ASDA, BT, Canon, Expedia, Kimberly-Clark and Virgin Media selected EE’s network to help grow their businesses.'
Author: Graeme Neill