Everything Everywhere added 150,000 new contract customers over the past three months, keeping revenues steady.
The joint venture between T-Mobile and Orange announced both its second-quarter and six-month financial results today, which claimed 50% of its users were now contract customers, bringing in five times more revenue per person than the previously dominant pay as you go consumer.
Everything Everywhere claimed that, of those contracted customers, 79% had signed up for two years, compared to 67% in the same quarter of 2011. Most used smartphones – 72% – and 91% of new customers signed up for smartphones.
Everything Everywhere reported revenue growth of 3.4% year on year, compared to 2.9% last quarter, but this was before mobile termination rates (MTRs) were taken into account – the wholesale fee operators charge other phone companies to complete a call.
An Ofcom ruling in March last year has forced all the mobile operators to start cutting this fee, which had reached 4p per minute for each call, down to less than 1p by 2015, which has affected profits.
When the effect is included in the results, Everything Everywhere actually showed a fall in revenue of 1.1% year-on-year, equating to just under £1.5bn for the quarter.
Revenues over the first six months of 2012 were just under £2.99bn, which again with the MTR impact had fallen by 1.8% from last year, but without showed a rise of 3.1% year-on-year.
The task of merging the two firms has made progress, with operational cost savings hitting £316m. This includes switching off 1,390 sites which had been made redundant thanks to network optimisation and the removal of 30 overlapping stores.
This has meant job cuts, with 100 announced in April to go from the retail division and a further 550 support roles confirmed back in November 2011.
“In the first half, we delivered a solid commercial performance, with good underlying revenue growth,” said Olaf Swantee, CEO of Everything Everywhere.
“We are making strong progress integrating the legacy Orange and T-Mobile businesses to create cost efficiencies and deliver planned synergy targets, while investing in significant network upgrades to further improve our customer experience.”