As it responds to the new world of hybrid work, mobile operator Three UK has reported a solid 2021, with gains in revenue, EBITDA (earnings before interest, taxes, depreciation and amortization), active contract customer and handset revenue, all with reduced churn.
For the year ended 31 December 2021, the company reported revenues up 4% on an annual basis to £2.44bn, driven by what it described as a strong performance in consumer contract, as well as new revenue streams such as mobile virtual network operator business line Smarty, home broadband solutions and business to business.
The revenue rise was the engine for EBITDA increasing by 10% compared with the end of 2020, totalling £609m due to an increase in margin supported by new lines of business, namely B2B & Smarty. The company also said it had racked up a record year for wholesale, coupled with a continued focus on cost efficiencies.
Three’s active contract customer base grew by 7% year on year, adding more than 500,000 subscribers to bring the total to eight million, with 2021 net additions the highest since 2012. Handset business climbed by 13% year on year to be worth £772m, reflecting advances not only in the customer base, but also with average handset price growth, said the company. Registered contract churn inched downwards from 1.4% to 1.3%, due to a focus on execution and retention programmes.
A particular highlight was Three UK doubling its B2B base in size across the year, with further growth to be supported by the completion of a multimillion-pound investment in the first phase of digital transformation. Looking at its 5G business, the company noted that its £280m spend on low-frequency spectrum, improving its market-leading 5G spectrum portfolio, meant that customers can benefit from what it claimed was an “outstanding” experience now and over the longer term
Average data usage per customer per month increased by 20% to 19GB in December 2021, and its 5G coverage included more than one-third of the UK population across 370 towns and cities, with more than 2,500 sites live. The company also claimed it had the largest dedicated 5G spectrum and said it had inked a major agreement with BAI Communications to become launch partner for 4G and 5G on the London Underground.
Commenting on the annual results for 2021, Three UK chief executive Robert Finnegan said the foundations for growth were enhancements to its network, but warned that future prospects could be affected by what he called the “dysfunctional” nature of the UK market’s regulation, which he said was making necessary consolidation difficult.
“These enhancements are being supported by our highest-ever levels of investment and are testament to the hard work of our staff and their efforts throughout a challenging 2021,” said Finnegan. “However, the UK market with four operators continues to remain dysfunctional and requires a structural change to improve the overall quality of infrastructure that UK customers should expect.”
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