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UPDATE 1-Mobile group EE gets some revenue boost from 4G users

Tue, 19th Feb 2013 11:59

* Sees 10 percent revenue uplift among 4G users

* Adds 201,000 contract users in Q4

* Says 4G roll out on track

By Paul Sandle

LONDON, Feb 19 (Reuters) - Mobile phone company EE, whichlaunched Britain's first 4G services in October, said on Tuesdayit had seen a revenue uplift from early adopters but did notreveal how many customers had signed up for the faster, moreexpensive, network.

The company, Britain's biggest mobile operator, saidcustomers on its new super fast 4G network were spending 10percent more on average by making video calls and consuming moredata.

"When you look at the early customers migrating from (3Gbrands) Orange and T-Mobile to EE we are seeing a 10 percentARPU (average revenue per user) increase," Chief Executive OlafSwantee said.

He would not reveal 4G subscriber numbers because rivals arepreparing to launch their own services later this year.

"I can say our plan is on track, we are very pleased withthe progress we are making," he said.

EE, a joint venture between France Telecom andDeutsche Telekom, was given the go-ahead byregulators last year to reuse its existing airwaves for 4G,giving it a head start on rivals.

Telecoms regulator Ofcom is auctioning more 4G airwaves atthe moment, which will enable Vodafone, O2 andThree to launch 4G services from the middle of 2013.

The new networks offer speeds around five times faster than3G, and deliver additional capacity for smartphones to accesscontent like video and music.

Analysts at telecoms consultancy Ovum said the lack ofdetails on 4G customer numbers was telling.

"If customer uptake was far ahead of expectation, then wewould hear about it," analyst Steven Hartley said.

"We therefore have to conclude that uptake has not beenspectacular. That doesn't make it a disaster, just notnecessarily fully optimising its monopoly position."

EE, which has 27 million customers, added 201,000 netcontract subscribers in the fourth quarter, a slowdown from250,000 in the third quarter. The company gave no breakdown ofhow many were 4G subscribers.

But Swantee said customers were switching to 4G when theyupgraded their smartphones, typically after two years.

"In total for the second half we had 1.9 million upgrades,so that's where most (4G) activity is happening," he said."Clearly also a part of the net adds are customers coming to4G."

Swantee said 4G was available in 18 cities, covering 43percent of the population at the end of 2012, 10 percentagepoints ahead of its plan.

The group, which introduced the EE brand for its new servicealongside its existing Orange and T-Mobile offers, priced its 4Gtariff 10-20 percent higher than equivalent 3G plans.

It was also seeing good demand for faster data connectionsfrom corporate customers, a business segment where EE previouslytrailed rivals, Swantee said.

"The B2B uptake on 4G is very strong," he said. "We havealready over a 1,000 corporate customers using 4G in variousdegrees."

EE, previously called Everything Everywhere, postedfull-year adjusted core earnings of 1.41 billion pounds ($2.18billion), broadly flat on the year before, on revenue of 6.7billion pounds, down 1.9 percent.

Its service revenue of 5.95 billion pounds rose 2.7 percent,excluding the impact of regulatory price changes.

EE's owners are reviewing the business, and have said apublic listing is the preferred option. Swantee said he had noupdate on the intentions of France Telecom and Deutsche Telekom.

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