EverythingEverywhere grows earnings despite revenue fall

Rumors Deutsche Telekom is considering an exit from the UK market seem premature, given its UK joint venture with France Telecom just reported a 2.4% rise in annual EBITDA.
EverythingEverywhere, the combination of Deutsche Telekom’s T-Mobile UK with France Telecom’s Orange business, grew EBITDA to £1.4 billion (€1.6 billion) in 2011 despite a 2.1% fall in revenue due to cuts in mobile termination rates. The EBITDA margin increased 1.3 percentage points year-on-year to 20.9%, due mostly to a cut in operating expenditure.
Chief Olaf Swantee attributed the EBITDA growth to lower churn, achieved by increasing the level of network sharing between the former T-Mobile and Orange infrastructure. “We are seeing good commercial momentum and are capitalising on the smartphone and data opportunity to drive underlying growth,” he notes.

A report by Bloomberg last week claimed Deutsche Telekom is considering selling out of EverythingEverywhere, as it seeks to generate cash to cover its failed attempt to sell T-Mobile USA to AT&T.