Everything Everywhere, the UK joint venture of T-Mobile and Orange, has announced its first annual earnings since the merger took place.
The results cover the nine months to the end of 2010, as Everything Everywhere began its joint operations in April, just after it gained regulatory approval from the European Commission. The results show a slight drop in pre-pay customer numbers (down 1.04 million year-on-year to 15.27 million in the fourth quarter of 2010) and an almost-equivalent rise in contract customer numbers (up 974,000 to 11.95 million).
"2010 has been a year of achievement for Everything Everywhere," said chief executive Tom Alexander in a statement on Wednesday. "We continued the rapid integration of the new company, completing a companywide restructuring and maintained good commercial momentum throughout, with improved retention and growth on our contract customer base."
Alexander said T-Mobile's cost-centric strategy was now "aligned" with Orange's customer growth strategy and that this paid off in the fourth quarter of 2010.
We continued the rapid integration of the new company, completing a companywide restructuring and maintained good commercial momentum throughout. – Tom Alexander, Everything Everywhere
"Contract customer net additions over our first nine months were up 33 percent on the same period in 2009, up to 752,000, with 300,000 added in the fourth quarter," he said. "This growth has also translated into an increasing proportion of contract customers, as against pay-as-you-go, which was up to 44 percent of the base at the end of 2010, as compared to 40 percent at the end of 2009."
Everything Everywhere's contract customers are increasingly signing up for longer, two-year terms, Alexander noted, saying this was a "strong factor" in stopping customers from leaving.
The fixed-line home broadband side of the business, which Orange brought with it, is less successful — down 126,000 year-on-year to 770,000 customers. However, Everything Everywhere said, this erosion has slowed down and "the company expects to return to customer growth in this area from mid-year".
The company's results also included an interesting fact about smartphones: the advanced handsets now account for 82 percent of all Everything Everywhere's monthly subscriptions, compared with 50 percent a year ago.