Everything Everywhere gains momentum, but T-Mobile UK sale rumours persist

The UK's largest operator Everything Everywhere (EE) saw solid revenue growth last year as it customers switched from low-cost pay-as-you-go tariffs onto smartphone contracts.

The company reported that it successfully removed further costs from the merging of Orange and T-Mobile, which has boosted core earnings. EE said that service revenue growth was up 2.1 per cent, but down the same amount when the impact of regulatory changes was included.

EE CEO Olaf Swantee told the Financial Times: "We have made good progress in the strategic plan. The focus [now] is on network integration. We can build a very strong digital infrastructure for the UK."

Swantee added that EE was on track to achieve an increase in data revenue to more than half of its overall turnover--a target the company had set earlier, with the ratio of non-voice revenues rising from 36 per cent to 43 per cent.

Swantee highlighted the recovery in the T-Mobile business--which had been struggling prior to the merger with Orange--and stressed his commitment to supporting both sides of EE's operations despite ongoing speculation that T-Mobile would be sold off.

While Swantee ducked questions over the possible sale of T-Mobile UK during a press conference, a Reuters report, citing an unnamed analyst, said that Deutsche Telekom (DT) had recently considered an IPO for part or all of its shareholding in the UK joint venture, but had decided against the move due to market conditions and other factors.

A banker close to the telecoms industry told Reuters that if DT wanted to exit the UK market an IPO was the most likely route. "I don't see that until the second half of this year or next year at the earliest, but DT is looking at all its assets with a view to what to exit," the unnamed banker said. The source thought it unlikely that France Telecom would buy out DT's stake.

EE has also said it will return to the bond market this year to raise funds for the auction of LTE spectrum. The company told the Financial Times that LTE was now a priority and could deploy the network technology this year ahead of the auction if Ofcom, the UK telecoms regulator, will allow it to use certain existing spectrum.

For more:
- see this Financial Times article (reg. req.)
- see this Reuters article

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