EE on Monday reported falling revenue and mobile customers despite strong demand for its 4G service.
The U.K. telco, which is in the process of being acquired by incumbent BT, generated £1.5 billion in operating revenue during the three months to 31 March, down 1.1% on last year. Excluding the impact of regulation, operating revenue increased 0.3%, the telco said.
Total connections edged up to 30.9 million from 30.7 million. Of that total, 24.3 million were branded mobile customers, down from 24.6 million in Q1 2014. The decline was driven by a 7.2% fall in prepaid customers, which was not quite offset by a 3.3% increase in postpaid customers.
The increase in EE’s overall customer base was driven by growth in machine-to-machine (M2M) and fixe d broadband connections, which grew by 13.8% and 18.7% respectively.
Of particular concern to EE will be the considerable slowdown in branded contract net additions, which came in at 53,000 for the first quarter, significantly lower than the 123,000 added in the same quarter a year ago.
All of this means that the vast majority of the 1.7 million new 4G customers that EE added during the quarter were existing customers upgrading their service. EE ended March with 9.3 million 4G customers, up from 2.9 million a year ago.
"We are delivering strong, consistent commercial performance by giving our customers the best mobile voice and data network experience in the U.K.," said Neal Milsom, CFO of EE, in a statement.
EE’s 4G network now covers 55 million people; the company said it is on track to reach 14 million 4G customers by the end of 2015.
