EE talks up Q1 4G and broadband subscriber gains

The UK’s largest mobile operator by subscriber count – EE – has announced Q1 revenues that were broadly flat year-on-year. Within that, however, EE continued the healthy growth of its 4G subscriber base and also added 50,000 broadband subscribers.

Operating revenue was up 0.3% yoy, but down 1.1% when regulatory impacts were accounted for. Similarly ARPU (average revenue per user) was nominally up 1.1%, but down 0.5% if you include regulation. Data revenue accounted for 52% of ARPU, up from 47% a year ago.

EE added 1.7m 4G subscribers to take its 4G subscriber total to 9.3m. However there were only 111,000 postpaid net adds in the quarter (half of which were M2M), and postpaid churn of just 1.2%, suggesting the vast majority of those ‘new’ 4G subscribers were EE customers upgrading from 3G. EE reckons it’s still on target to hit 14 million 4G subscribers by the end of the year.

“We are delivering strong, consistent commercial performance by giving our customers the best mobile voice and data network experience in the UK,” said Neal Milsom, Chief Financial Officer of EE. “As much of the UK market now has smartphones, we are leading the charge into new growth areas by cross-selling our innovative range of connected products including 4G tablets, 4G wifi, fixed broadband and EETV to our existing customers.”

All in all it was a solid but unspectacular quarter for EE, whose senior management presumably have half an eye on the impending BT acquisition. It will be interesting to see how much emphasis EE puts on non-core developments, such as broadband and TV subscriber growth in the quarters leading up to the acquisition going through.

EE Q1 2015 slide

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