UK's EE rides high on LTE demand

UK operator EE added almost half a million LTE customers in the third quarter and said it was able to boost data revenue and its contract customer base compared to the previous year.

The operator, which now competes with Vodafone UK and Telefónica's O2 UK on high-speed LTE services in the UK, said it now has 1.18 million LTE customers and has beaten its target of reaching 1 million customers by four months. The percentage of postpaid LTE customers is now 56 per cent, after a net increase of 181,000 postpaid customers in the quarter.

Nonetheless, the company still saw a 2.7 per cent decline in its overall customer base to 27.4 million from 28.15 million a year previously, while overall service revenue declined by 0.6 per cent excluding the impact of regulatory measures affecting roaming and mobile termination rates.

On the plus side the total number of contract customers increased by 5.7 per cent to 14.15 million, while EE said more than 3,200 corporate customers are now using LTE services.

The drive towards postpaid customers has also benefited ARPU, which increased by 3.3 per cent, while data revenue increased by a quarter thanks to LTE and smartphone adoption.

Jefferies analysts wrote in a research note that prepaid losses of 345,000 customers reflect the reduction in the company's efforts in this area and the market shift brought about by the growing adoption of mobile data services.

EE, which also operates the 3G brands Orange UK and T-Mobile UK and is owned by Deutsche Telekom and France's Orange, said its LTE network now covers 117 towns and cities and it is targeting 140 by the end of the year. Efforts to maintain its LTE lead over rivals include the provision of "double-speed" LTE services, now available in 20 cities, the launch of a new range of cheaper 4GEE tariffs with high inclusive data allowances and the UK market's first data sharing plans for consumers, Shared 4GEE.

On the wholesale side, EE recently re-signed its MVNO agreement with Virgin Mobile and signed up the Asda supermarket chain for Asda Mobile. BT has also picked EE as its future mobile partner.

Reuters noted that CEO Olaf Swantee provided no update during the results presentation on plans by the two parent companies to sell or launch an initial public offering for the operator. Swantee has previously indicated that an IPO could be possible in London next year.

EE also recently warned that it may be forced to reduce capital expenditures if UK telecoms regulator Ofcom introduces plans to raise the fees on existing spectrum licences.

For more:
- see this Reuters article
- see this FT article (sub. req.)

Related Articles:
EE slashes LTE prices, warns on capex cuts
Ofcom threatens fivefold increase in UK spectrum fees starting in 2014
EE crosses 100 cities covered with LTE, as rivals get on their marks
EE: We want to be more British

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