EE’s 4G fails to excite as biggest UK mobile network makes £249m loss

By Sooraj Shah
19 Feb 2013 View Comments
Arrow going down

EE, the UK's first mobile network to launch 4G, has revealed that it has made a loss before tax of £249m in 2012.

The loss is more than double the £113m it lost in 2011, while its annual revenue also reduced by 1.9 per cent from £6.78bn to £6.65bn. The loss after tax was £191m for the year ended 31 December 2012, compared with a loss after tax of £104m in 2011.

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EE, a joint venture between France Telecom's Orange and Deutsche Telekom's T-Mobile, said that it added 201,000 contract customers in the fourth quarter of 2012, the period just after it launched the UK's first 4G mobile network. It suggested that many of these additions were customers making upgrades as opposed to new customers.

"We are seeing solid early 4G momentum migrating Orange and T-Mobile customers to higher value EE 4G price plans in areas where 4G coverage is available," the firm said.

The number of additions is still below the 250,000 it made during the third quarter of 2012. EE did not disclose how many of its net additions had signed up specifically for 4G, suggesting that the firm's headstart against its rivals in the UK has not yet proved overly successful.

EE claimed that early Orange and T-Mobile 3G customers who had migrated to 4G on EE were paying an average of about 10 per cent more per month.

It added that 52 per cent of its customers are on contracts, delivering five times more average revenue per user than pay as you go customers. There was also an increase of nine per cent in contract smartphone adoption (to 78 per cent), with 94 per cent of new contract customers selecting smartphones.

The mobile operator claimed to have also seen "early 4G momentum" with a range of business customers.

"More than 10 per cent of our corporate customers are trialling or using 4G including Gatwick Airport, Kier, Microsoft, Morrisons, Saatchi & Saatchi Fallon Group, Sony Music and TNT Post," it said.

"One in four new SME customers are now selecting 4G services."

In a statement, EE CEO Olaf Swantee praised the firm for what he believed was "good progress".

"In the past year, we delivered solid financial performance, underpinned by good progress integrating the business and success in attracting high-value customers," he said.

"At the same time, we built a strong platform for growth, launching a new company, new network, new customer brand, new retail estate and being the first to provide UK consumers and businesses with 4G mobile services alongside fibre broadband."

EE hopes to have 4G coverage in 65 towns and cities, covering more than 50 per cent of the UK population by June 2013. Along with rivals O2, Vodafone and Three, EE is still awaiting the outcome of the 4G spectrum auction. The decision of which firms are allocated spectrum is to be announced within the next month. The other companies involved in the auction are MLL Telecom, BT subsidiary Niche Spectrum Ventures and PCCW subsidiary HKT.

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