October 22, 2013
LONDON -- EE Results for the Third Quarter to 30 September 2013
Rapid 4G customer growth: 4G postpaid base up 493k or 72% over Q2 base to nearly 1.2m, exceeding target of 1m 4G customers four months early. Strong progress upgrading existing customers to 4G, with migrations showing high single digit percentage increase in Average Revenue Per User (ARPU). 4G available in 117 towns and cities.
Underlying service revenue performance: Service revenue excluding impact of Mobile Termination Rates and roaming regulations of -0.6% year-on-year (yoy) (Q2 2013: 0.0%). Service revenue including impact of regulation -3.3% (Q2 2013: -4.4%). Mobile ARPU growth +3.3% yoy (Q2 2013: +2.8%) excluding regulation, and +0.5% (Q2 2013: -1.6%) including impact of regulation, driven by continued postpaid customer growth.
Successfully acquiring and retaining high value customers: Postpaid mobile net adds of 181k driving postpaid base +5.7% higher yoy. 56% of customer base now postpaid, delivering six times higher ARPU than prepaid. Prepaid base reduced by 345k, with revenue trend in line with industry shift towards postpaid. Effectively retaining postpaid customers, with postpaid churn of 1.1%, the tenth consecutive quarter at 1.2% or below.
Data (non-text) revenues up by a quarter yoy driven by strong smartphone adoption: data (non-text) revenues +12 ppts yoy to 43% (Q3 2012: 31%) of ARPU, and data/text (non-voice) revenues +8 ppts yoy to 56% (Q3 2012: 48%) of ARPU. 64% of new/renewing postpaid customers select 4G contracts or 4G-ready devices, +8 ppts on Q2 2013 and further seeding base for 4G growth.
Major brands ASDA, BT, Canon, Expedia, Kimberly-Clark and Virgin Media select EE network: 3,200+ companies on 4GEE, including Canon, Expedia and Kimberly-Clark. Machine-to-machine (M2M) base +26%, with agreement for future growth signed with RAC. Partner of choice for Mobile Virtual Network Operators (MVNOs), re-signing Virgin Media, signing ASDA Mobile and, subject to final contract, agreement for BT’s customers and 88,000 employees.
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