EE swings towards postpaid, mounts latest LTE trial
UK's largest cellco turns on test network in 1.8GHz to serve rural users, but sees Q1 figures marred by termination rate cuts
Published: 3 May, 2012
Everything Everywhere (EE), the UK's largest mobile operator, is still campaigning to be allowed to launch LTE services this autumn in its refarmed 1.8GHz GSM spectrum. In the hope that regulator Ofcom will relent, it has kicked off its latest trial, running in Cumbria, a rural part of north England.
The trial network was switched on by the secretary of state for education, Michael Gove, and local member of parliament Rory Stewart, who said that 4G had the potential to provide "an important stimulus for the UK". The network will test rural residential access, applications such as remote learning, and would eventually also serve the many tourists in the area - the test centers on the district of Threlkeld, a heavily visited part of the UK Lake District.
The trial will initially involve about 50 local residents and run until the end of July in the 1.8GHz band. That is currently used for 2G services by Orange and T-Mobile, the partners in EE, which are converging their networks.
Meanwhile, EE also announced its first quarter results, which saw a 2.5% year-on-year drop in service revenue to £1.5bn, as reductions in mobile termination rates had their effect. The operator said the revenue would have been up by almost 3% on the year-ago quarter had the impact of regulatory changes to MTS been excluded.
Underlying growth was driven by a 7.3% year-on-year increase in high value postpaid customers, including 151,000 net postpaid additions in the quarter. These subscribers now account for nearly half (49%) of the customer base and generate five times more ARPU than prepaid users. Over 70% of those postpaid subscribers now use smartphones and that figure rises to 90% for new sign-ups, driving a 9% rise in data and messaging revenue. This now accounts for 45% of ARPU. Excluding messaging, data revenues were up 10% and account for 27% of ARPU.
"We are seeing improved underlying service revenues, driven by rapid data revenue growth, as we successfully upgrade customers to smartphones and higher value postpaid agreements," said CEO Olaf Swantee.
EE is engaged in a program to integrate its two networks and said its Smart Signal initiative was providing "seamless 3G handover between the Orange and T-Mobile networks, resulting in twice as many customers using the other network's signal than before." It also said it had completed the nationwide roll-out of 21Mbps HSPA+ in its 2.1GHz band.