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Three ploughs £276m into 5G preparation

Hutchison-backed mobile operator Three is spending lavishly as it bids to be first to market with a commercial 5G network

Mobile network operator (MNO) Three spent £125m during the first six months of 2018 on new IT and network upgrades in support of the coming launch of 5G services, the firm has revealed.

Added to the £151.3m it spent on 20MHz of 5G-ready radio spectrum back in April, Three has already spent over £200m on preparing for 5G.

Among the work being undertaken is the unbundling of more BT local telephone exchanges through a partnership with SSE Enterprise Telecoms, which will help it connect more of its mobile masts to fibre backhaul, as well as adding more capacity for its existing 4G services.

It has also signed a new contract with Huawei for 5G network roll-out, ahead of a future trial expected to begin within six months.

“Over the course of 2018, we will accelerate the rollout of our 5G network and the opportunity this brings to both our existing and prospective base of customers and partners,” said Three CEO Dave Dyson.

“All the key components that are needed for a successful 5G service have been procured over the last few years and I am excited by the prospect of trialling 5G soon, working together with our new IT and core network infrastructure.”

Speaking as the operator unveiled its first half financial results to the end of June, Dyson revealed the firm made total revenues of £1.19bn, up 2% year-on-year, while earnings were up 7% to £364m. Contract average margin per user (Ampu), sank 7% to £15.34.

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Having breezed past the 10 million customer mark late in 2017, Three said its customer base grew 6% over the first six months of the year to 10.1 million, and contract handset churn was down a further 9% to just 1%. The average Three customer now uses 7.6GB of data per month, up 10% on this time last year.

“I am pleased to report further progress in H1 2018, even as we re-build the business for the future,” said Dyson. “Our financial performance was solid and builds on the strong foundations we reported at FY 17.  I am proud of the continued improvements in customer experience and our lowest ever contract handset churn rate reflects a business that has a genuine focus on its customers.”

“We continue to collaborate with a variety of like-minded brands which will enable us to deliver a first-class experience to our customers. We are particularly pleased to have added Snapchat to our Go Binge offer, as well as launching Superdrug Mobile and our partnership with EasyJet.

“These are just some examples of how we are increasing our brand recognition and diversifying our revenue streams as well as giving mobile consumers enhanced value and choice.”

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