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Three H1 revenues drop 2pc to £1.05bn after failed O2 merger

Alex Yau
August 11, 2016

The operator also recorded a 12 per cent increase in EBITDA from £311 million to £348 million in the same period

Three has released its financial results for the first half of the year, revealing a two per cent year-on-year (y-o-y) decline from £1.07 billion to £1.05 billion.

The decline in revenue comes after the European Commission blocked CK Hutchison’s £10.25 billion bid to takeover of O2 in May. European Commissioner Margrethe Vestager prohibited the deal having expressed worries that it would have a negative impact on innovation and competition in the mobile sector.

Despite the decrease, EBITDA rose y-o-y by 12 per cent from £311 million to £348 million. EBIT within the same period also increased y-o-y by 16 per cent from £200 million to £231 million. Net margin per unit also dropped by one per cent to £12.81.

The operator also claimed that it had net additions of 191,000 customers in that period. However, the number of registered connections on contract stayed flat at over six million, whilst prepaid numbers rose by seven per cent from 2.8 million to over three million. Total registered customers in the first half of the year increased y-o-y from 10.7 million to 10.8 million. The full number of active customers currently stands at 9.1 million.

These latest figures follow previous results in March which showed annual revenue of £2.1 billion for last year. EBITDA in that period stood at £686 million. The operator’s chief executive Dave Dyson claimed the increase was due to a surge in data usage. Average data usage for its customer base increased from 3.3GB in 2014 to 5GB. Customers are now on average using 5.4GB of data per month, according to Three.

Speaking about these latest set of results, Dyson said: “I am proud that our customers are more willing to recommend us than those of any other operator and we will continue to build a modern mobile business that delivers what today’s customers need.

“I want to continue to lead the industry on mobile data usage and network reliability and my immediate focus is securing more spectrum which will allow us to gain further scale and become a stronger influence on the industry.”

A recent Which? study published in April claimed Three was the worst network in the UK for 4G coverage. It found that customers could only access 4G 39.8 per cent of the time in comparison with EE (60.6 per cent), Vodafone (57 per cent) and O2 (56 per cent).

Feel at Home additions

Three has also added 24 new countries to its Feel at Home service, bringing the total number of countries customers can roam in from September to 42.

The roaming package launched in 2013 and allows customers to use their minutes, text and data allowance in selected countries at no additional cost. Countries currently covered include Spain, France, Switzerland, Israel, Finland, Norway, USA, Indonesia, Sri Lanka, Macau, Australia, New Zealand, Italy, Austria, Hong Kong, Sweden, Denmark and Republic of Ireland.

Three claims more than three million customers have saved more than £2.6 billion in roaming charges since Feel at Home launched.

The added countries are Germany, Greece, Portugal. Croatia, Poland, Belgium, Netherlands, Cyprus, Czech Republic, Bulgaria, Hungary, Romania, Malta, Lithuania, Slovakia, Estonia, Latvia, Iceland, Slovenia, Luxembourg, Liechtenstein, Gibraltar, Isle of Man and Channel Islands (Guernsey and Jersey).

Chief financial officer Richard Woodward added: “We are absolutely focused on giving our customers the best possible mobile experience and the expansion of Feel At Home to cover more than 80 per cent of customer trips is clear evidence of this. As a result customers are staying with us longer, recommending us to their family and friends and choosing to spend more.”


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