Everything Everywhere posts earnings drop

Everything Everywhere, the joint venture between Orange and T-Mobile, has reported a drop in turnover and profit in its first annual financial results since the merger.

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Turnover for the nine months to 31 December was £5.3bn, down from £5.4bn in the same period the previous year. Underlying profit in the same period was £1bn, down from £1.1bn in 2009.

The 2009 figures represent Orange and T-Mobile results combined, pre-merger.

The company added 300,000 new contract customers in the fourth quarter, up 8.9% for the nine month period, but lost 1 million pay-as-you-go customers in the last nine months of 2010.

The company says the loss of pay-as-you-go customers was due to the fact that it is investing heavily in attaining more contract customers, who tend to be more profitable for mobile providers.

Everything Everywhere now has more than 27 million customers in the UK, making it the largest UK network by customer numbers.

Smartphones now account for 82% of all its contracts, compared to 50% for the same quarter last year.

CEO Tom Alexander says that despite weak fourth quarter results, the company is on track to achieving the growth targets it set out in its long-term strategy when the merger was formed July 2010.

He adds: “The strategy for T-Mobile was to focus on costs and profitability, in contrast to Orange’s customer growth strategy; these strategies are now aligned, with a continued focus on costs coupled with a drive to invest in contract customer growth on both brands, as evidenced by the performance in the fourth quarter.”

Last year the mobile network axed 11 posts from the joint Orange and T-Mobile brand team, amid 1,200 redundancies across the company, in a cost-cutting drive. The firm is aiming for a further £3.5bn in cost savings by cutting out duplication between the two brands.

Earlier this month the company announced it is to open its first Everything Everywhere branded stores.

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