(Image Credit: iStockPhoto/Creativeye99)
Earlier this year BT announced an agreement to acquire the UK’s largest mobile network, EE, in a transaction valued at £12.5 billion. If regulators approve the merger, it will reshape the UK telecommunications landscape and enable BT to offer genuine quad-play packages combining fixed-line, broadband, mobile and TV services.
We are delivering strong, consistent commercial performance
For now, EE continues to operate as an independent business. In the first quarter of 2015 the company reported operating revenues of £1.469 million, a decline of 1.1% compared with the same period a year earlier. That follows a 1.4% revenue fall across 2014 and highlights the pressure on mobile operators to find new revenue streams.
The BT deal could provide the scale and product bundling opportunities EE needs, while BT stands to gain from EE’s rapid expansion of 4G coverage. EE currently serves 31 million customers overall, with 9.3 million on its 4G service. The company says it is “firmly on track to reach our target of 14 million 4G customers by year-end.”
In the first three months of the year EE added 1.7 million 4G customers; 96% of the net additions during that quarter were 4G-enabled devices. If that growth momentum continues, EE could add a further 6.8 million 4G subscribers and reach about 16.1 million by the end of the year.
Neal Milsom, EE’s Chief Financial Officer, said: “We are delivering strong, consistent commercial performance by giving our customers the best mobile voice and data network experience in the UK.”
He added: “With smartphones now prevalent across much of the UK, we are pursuing new growth by cross-selling our innovative range of connected products, including 4G tablets, 4G WiFi, fixed broadband and EE TV, to our existing customer base.”
The pending BT/EE transaction has already prompted moves elsewhere in the market. Hutchison Whampoa, owner of Three UK, agreed to acquire Telefónica’s O2 for £10.25 billion in a deal that would allow it to overtake EE and become the UK’s largest mobile operator.
Do you think the BT deal will boost EE’s operating revenue? Let us know in the comments.