4G off to a slow start as EE fails to woo users
THE LAUNCH of the UK’s first 4G mobile network has so far failed to convince Vodafone and O2 customers to switch to EE, company results suggested yesterday.
EE, which owns Orange and T- Mobile as well as its new self-branded network, signed 201,000 new customers to contracts during the final quarter of last year. The period began shortly after EE launched the UK’s first high speed mobile internet service, gaining a head start on its rivals.
Although EE did not reveal how many customers are now on 4G contracts, citing the sensitive situation as operators bid in the 4G auction, the figures for new customers were unspectacular. In fact, EE had signed up more new contract customers in the previous quarter, when it was not offering 4G.
Chief executive Olaf Swantee played down sug- gestions the 4G launch had gone poorly, saying his focus was on con- vincing Orange and T-Mobile customers with expiring con- tracts to upgrade to 4G.
“We had 1.9m of our customers leav- ing contracts [in the quarter], that was my first priority, trying to convince them to take a 4G device. That’s a very strong feeding ground,” Swantee told CityAM. “The next priority is acquiring new high-value customers; I’m not interested in chasing volume.”
EE said those signed up to 4G were paying an average of 10 per cent more than those on Orange and T-Mobile, although this did not prevent a 2.6 per cent fall in annual service revenues to £5.95bn. Mobile revenues were hit last year by enforced cuts to charges for calling other networks.
Without these changes, EE said annual revenues rose 2.7 per cent. The company’s pre-tax losses more than doubled to £249m, although the company put this down to writing down the value of its assets and the investment associated with 4G.
Swantee said the loss would be unlikely to put off EE’s owners – France Telecom and Deutsche Telekom – from floating the firm.
Ofcom will today reveal the winners of the crucial first round of the 4G auction, which is expected to raise at least £3.5bn for the Treasury.