EE on track to reach 14M 4G subscribers by year end

EE said it is "firmly on track" to reach 14 million 4G subscribers by the end of the year, although subscriber growth is still not translating into higher revenue figures.

Operating revenue in the first quarter of the year was 1.1 per cent lower compared to the previous year at £1.47 billion (€2 billion/$2.2 billion). Excluding regulatory effects, the company said operating revenue grew by 0.3 per cent.

Mobile service revenue was down 1.7 per cent at £1.3 billion, although Jefferies analysts noted that this was an improvement on Q4 2014, when mobile revenue fell by 2.1 per cent. The company gained 1.7 million 4G subscribers in the first quarter to reach 9.3 million overall.

The UK-based mobile operator, which is in the process of being sold by Orange and Deutsche Telekom to BT, did report healthy revenue growth in its fixed business, saying that sales here improved by 15 per cent year on year with a net addition of 50,000 broadband customers.

EE noted that customer growth in both its mobile and fixed business is being driven by its efforts to sell combined mobile and fixed broadband packages and the "well-received launch of EETV".

"As much of the UK market now has smartphones, we are leading the charge into new growth areas by cross-selling our innovative range of connected products including 4G tablets, 4G Wi-Fi, fixed broadband and EETV to our existing customers," said CFO Neal Milsom.

In the mobile segment, 4G and data are now clearly king: data now accounts for 52 per cent of average revenue per user (ARPU) after rising 5 percentage points year on year. Of the total new connections in the first quarter, 96 per cent were on 4G.

The operator also noted that its 4G network now covers 87 per cent of the population, while its so-called "double-speed" 4G network covers 67 per cent. The company is targeting 99 per cent population coverage by 2017.

EE said it plans to continue with its existing strategy of cross-selling mobile and fixed products and services. The company quotes a "multiple product attach rate" of 1.22 connected products per postpaid voice customer, noting this indicates that the average number of products per customer has increased by 3.6 per cent since the first quarter of 2014.

This multi-service play will be further strengthened under a combined BT-EE, if the planned £12.5 billion acqusition is cleared by regulators. A final decision by the UK's Competition and Markets Authority is expected by the end of March 2016, Jefferies analysts noted.

For more:
- see this EE release

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