Three UK reports flat 2014 sales growth

Three UK has published its 2014 annual results showing flat revenue growth of 1% to £2.05 billion, however EBITDA increased by 31% year-on-year, while net customer service revenue was up 6% compared to 2013.

The telco’s active postpaid customer base increased 4% last year compared to 2014 and ita had 12% more prepaid customers. Overall, it had 6% bigger subscriber base than in 2013. Postpaid net ARPU (average revenue per active user) was £18.91, prepaid £5.30 and blended total net ARPU £15.08. ARPU for Three UK was not tracked the previous year so year-on-year comparison wasn’t possible.

The Hutchison Whampoa-owned operator said 42% of its 8.4 million customers are now using 4G, and reported that monthly data consumption per subscriber grew by 60% year-on-year from 2GB in December 2013 to 3.3GB in 2014. Three claimed this to be proof it is the market leader in data usage per customer. But this is hardly surprising given it is the only UK operator to automatically offer 4G to all customers.

The telco was also keen to highlight its Feel at Home service, which enables customers to use their data package for no extra charge when visiting the 16 countries currently included in the programme, including Australia, Finland, France, Italy and the USA. Further two countries, Spain and New Zealand, will be added as of April 1, which according to Three’s estimate will mean 65% of all its customers’ overseas trips will be covered by Feel at Home. It wasn’t clear, however, how the operator had arrived at this figure.

“By listening to our customers and focusing on their needs, our customers are happier than ever and their positive word of mouth is helping to attract more customers to Three,” Dave Dyson, Chief Executive, said. “We will continue to enhance our network and provide the plans and offers to help customers stay connected in more places both in the UK and overseas.”

Richard Woodward, Chief Financial Officer, said: “Our 2014 financial results demonstrate the successful execution of our strategy. New and existing customers are increasingly attracted to Three for our quality data network and offers like Feel At Home, which also means they are choosing to spend more and stay longer because of the value they receive. Our focus has been, and will continue to be, on giving our customers the best and fairest mobile experience available to support our financial growth.”

The free international roaming service in the nominated countries is a good perk but Three is facing toughening competition as the UK market heads towards more convergence with BT on the brink to acquire EE. It remains to be seen what will come from the talks between Hutchison Whampoa and Telefónica over a merger of Three and O2.