RPT-UPDATE 1-Mobile group EE gets some revenue boost from 4G users

Tue Feb 19, 2013 10:16am EST

* Sees 10 percent revenue uplift among 4G users

* Adds 201,000 contract users in Q4

* Says 4G roll out on track

By Paul Sandle

LONDON, Feb 19 (Reuters) - Mobile phone company EE, which launched Britain's first 4G services in October, said on Tuesday it had seen a revenue uplift from early adopters but did not reveal how many customers had signed up for the faster, more expensive, network.

The company, Britain's biggest mobile operator, said customers on its new super fast 4G network were spending 10 percent more on average by making video calls and consuming more data.

"When you look at the early customers migrating from (3G brands) Orange and T-Mobile to EE we are seeing a 10 percent ARPU (average revenue per user) increase," Chief Executive Olaf Swantee said.

He would not reveal 4G subscriber numbers because rivals are preparing to launch their own services later this year.

"I can say our plan is on track, we are very pleased with the progress we are making," he said.

EE, a joint venture between France Telecom and Deutsche Telekom, was given the go-ahead by regulators last year to reuse its existing airwaves for 4G, giving it a head start on rivals.

Telecoms regulator Ofcom is auctioning more 4G airwaves at the moment, which will enable Vodafone, O2 and Three to launch 4G services from the middle of 2013.

The new networks offer speeds around five times faster than 3G, and deliver additional capacity for smartphones to access content like video and music.

Analysts at telecoms consultancy Ovum said the lack of details on 4G customer numbers was telling.

"If customer uptake was far ahead of expectation, then we would hear about it," analyst Steven Hartley said.

"We therefore have to conclude that uptake has not been spectacular. That doesn't make it a disaster, just not necessarily fully optimising its monopoly position."

EE, which has 27 million customers, added 201,000 net contract subscribers in the fourth quarter, a slowdown from 250,000 in the third quarter. The company gave no breakdown of how many were 4G subscribers.

But Swantee said customers were switching to 4G when they upgraded their smartphones, typically after two years.

"In total for the second half we had 1.9 million upgrades, so that's where most (4G) activity is happening," he said. "Clearly also a part of the net adds are customers coming to 4G."

Swantee said 4G was available in 18 cities, covering 43 percent of the population at the end of 2012, 10 percentage points ahead of its plan.

The group, which introduced the EE brand for its new service alongside its existing Orange and T-Mobile offers, priced its 4G tariff 10-20 percent higher than equivalent 3G plans.

It was also seeing good demand for faster data connections from corporate customers, a business segment where EE previously trailed rivals, Swantee said.

"The B2B uptake on 4G is very strong," he said. "We have already over a 1,000 corporate customers using 4G in various degrees."

EE, previously called Everything Everywhere, posted full-year adjusted core earnings of 1.41 billion pounds ($2.18 billion), broadly flat on the year before, on revenue of 6.7 billion pounds, down 1.9 percent.

Its service revenue of 5.95 billion pounds rose 2.7 percent, excluding the impact of regulatory price changes.

EE's owners are reviewing the business, and have said a public listing is the preferred option. Swantee said he had no update on the intentions of France Telecom and Deutsche Telekom.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.