EE continues to blame regulation for drop in revenues

Mobile operator EE's third quarter results produce a mixed bag, with revenues down 3% but contract customer numbers up 250,000

EE has published results for its third quarter, blaming European regulations for its fall in revenue.

For the three-month period to 30 September 2012, revenues were just shy of £1.5bn, showing no change from the second quarter but a 3% drop from the same period last year.

EE said the change in mobile termination rates (MTRs) – the wholesale fee operators charge other phone companies to complete a call – and the enforced reduction of roaming charges from the European Union were responsible for the losses.

However, even with the effect of this removed growth was small at 3.1%, dropping from 3.4% in the previous quarter.

There was good news when it came to customers, however. EE claimed it had signed up an extra 250,000 contract users in the past three months, compared with 185,000 in the third quarter of 2011, and these more lucrative customers now made up 51% of its entire user base, up from 47% last year.  

The company’s fixed broadband offering – previously Orange Broadband but on the verge of EE rebranding – also performed well, with revenue growth of 12% year on year and a significant 97% paying for home phone line rental as well.

“We are delivering solid revenue performance and successfully attracting high-value contract customers, while creating growth opportunities through our new superfast EE brand,” said Neal Milsom, chief financial officer of EE.

“We have achieved key business goals in the past quarter and firmly established EE as the UK market leader,” he said.

Q3 was the first quarter EE reported as the newly branded firm, which began as Everything Everywhere but was formed from the merger of T-Mobile and Orange.

Next week, the company will become the first mobile operator to launch 4G services in the UK, so the fourth quarter will be the first time the effects of the new network on its revenues will be taken into account.

Image: iStockphoto/Thinkstock

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