Mobile Network EE Yet To Reap Benefit of 4G

RELATED QUOTES

SymbolPriceChange
VOD.L215.20-1.85

Mobile provider EE - the only company offering 4G services in the UK - has confirmed its revenues fell last year despite its rollout of faster broadband.

The company posted a drop in revenue from £6.78bn in 2011 to £6.65bn in 2012.

It also confirmed a loss before tax of £249m for 2012 - more than double the previous year.

In 2011, Everything Everywhere - Britain's biggest mobile operator - posted a loss of £113m.

To date, EE, which owns Orange and T-Mobile, is the only mobile network to launch 4G products in the UK.

Announcing its results for the year ending December 31, 2012, the mobile phone operator said it added 201,000 contract customers in the fourth quarter, during which it launched Britain's first superfast 4G mobile broadband service.

However, its CEO Olaf Swantee admitted that those who moved from 3G to 4G on average spent 10% more for their bills to gain the extra services.

He said that 1,000 corporate customers were now on 4G contracts, and the he was "pleased with the progress" in 4G uptake by small and medium enterprises.

Mr Swantee said a "relatively high proportion" of 4G customers were choosing £41-plus tariffs.

Plans include the launch of more lower end 4G packages in the coming months.

Mr Swantee said: "In the past year, we delivered solid financial performance, underpinned by good progress integrating the business and success in attracting high value customers.

"At the same time, we built a strong platform for growth, launching a new company, new network, new customer brand, new retail estate and being the first to provide UK consumers and businesses with 4G mobile services alongside fibre broadband."

The company said more than half of its customers were now on contracts, reflecting the growing popularity of smartphones, as it posted broadly flat full-year adjusted core earnings of £1.41bn, on revenue of £6.7bn, down 1.9%.

Its service revenue of £5.95bn rose 2.7% - excluding the impact of regulatory price changes.

Its network, which offers speeds up to five times faster than 3G, is now available in 18 cities including London, Birmingham, Manchester, Leeds, Sheffield, Bristol, Liverpool, Southampton, Edinburgh and Glasgow.

The company said it was ahead of schedule of the 4G rollout, adding that it expected 65 cities and 55% of the population to be covered by the superfast service by June this year.

Rival operators, including Vodafone (LSE: VOD.L - news) and O2 owner Telefonica, will be able to launch their own 4G services and products in the coming months.

Companies had threatened legal against communications regulator Ofcom over its 4G auction process, which allowed EE to be the first to offer a 4G network in the UK by using old 2G capacity.

More From Sky News