EE boosts pre-tax earnings, brings jobs home to UK

EE scraped a double-digit increase in earnings before interest, depreciation and amortisation (EBITDA) in 2013, as a cost-cutting programme offset declining revenue.

The UK operator, created by the merger of Orange's and Deutsche Telekom's local mobile businesses, grew EBITDA 10.1 per cent year-on-year to £1.5 billion (€1.8 billion/$2.4 billion), and improved the EBITDA margin by 2.8 percentage points to 24.3 per cent.

EE said a post-merger cost-cutting programme has now delivered £457 million-worth of savings, some £2 million higher than it targeted. However, sales--reported as turnover by the company--fell 2.6 per cent year-on-year to £6.4 billion. Service revenue, which comprises the bulk of EE's turnover, fell 3.7 per cent to £5.7 billion, due to regulatory cuts to mobile termination rates.

Chief executive, Olaf Swantee, hailed 2013 as a success, after the operator grew its post-paid subscriber base by 756,000 during the year and achieved its "best margin yet."

The company is targeting EBITDA margin of at least 25 per cent in 2014, and to maintain revenues.

EE said LTE subscriber numbers hit 2 million at the end of 2013, with 816,000 users added in the final quarter of the year alone. The surge in the final three months is likely due to the full launch of LTE services by EE and its rivals during the period. EE had previously offered LTE on refarmed 1800-MHz spectrum.

However, rival operators Vodafone and O2 are now clear to compete on a level playing field in LTE. Vodafone said it has signed up 500,000 LTE subscribers in the six months since launching its network, and O2 said a million of its customers can now access its LTE services--though it stopped short of revealing just how many of those are actually using its new network.

3 UK only launched LTE services in December, and has not reported user numbers yet.

EE separately revealed it is opening 1,000 new positions at its UK call centres, and plans to treble the size of an apprenticeship scheme to at least 1,300 people in the next two years, as part of a £50 million investment in customer service.

The call centre jobs are being brought back "in house" from overseas centres, with the first batch of 250 positions due to be created in the spring.

"[W]ithin 18 months, I want to be able to say that EE has done for customer service in the UK what it has done for networks," Swantee said, adding that the plan to grow the operator's apprenticeship programme "will play a significant role in tackling youth unemployment in many areas, and bring a large number of digitally skilled employees into the business."

UK Prime Minister, David Cameron, applauded EE's move. "I'm…delighted that the successful EE apprenticeship scheme will be expanded to help even more young people develop their skills."

For more:
- see EE's earnings release
- see the EE jobs announcement

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