Everything Everywhere declines on debut

Everything Everywhere, the newest UK operator, has posted an underwhelming first set of results, but continues to talk up the positive effects of the merger that created it.
The joint venture between Orange UK and T-Mobile UK reported a 4.8% decrease in pro forma revenue to £1.8 billion (€2.09b) in its first quarterly results since the merger was completed in April.
The introduction of lower regulatory caps on mobile termination rates hit revenue in Q2 by £101 million, the company said. Barring these effects, revenue would have grown 1%.
Ebitda fell 18.5% to £309 million, while ebitda margins shrank to 18% from 21%. ARPU declined 7.7%.
While the venture's total number of customers increased 3.4% to 27.9 million, subscribers to Orange's Home broadband service fell 20% to 838,000. Monthly churn fell to 2.2% from 2.5%.
The results - and the company's conservative target of 25% ebitda margin by 2014 - disappointed analysts, FT.com said
But Everything Everywhere said it was still certain of achieving synergies of at least £3.5 billion from the merger.
The company flagged a network expansion to help ensure this target – it aims to increase its number of network sites from 16,000 to 18,000 by 2014, with its 3G network covering 99.6% of the population.
Rivals Vodafone and O2 currently cover a respective 85% and 84% of the population with their 3G networks, and have not announced any specific coverage targets.
Everything Everywhere also announced plans to expand its retail network, bringing the number of stores to 720.
Roaming arrangements allowing customers to use both networks will begin from next week, Everything Everywhere said.