Three UK publishes Half Year results 2023
Three UK continues to perform well, delivering customer growth and improving network performance but EBITDA less Capex gap has widened by over 50%
At Three UK our mission is to provide better connectivity, every day, for every customer. The strategy to deliver this is centred on four key objectives: improve the network experience; grow the business; transform customer experience; achieve our financial objectives.
Delivering growth
- Revenue up 4% to £1.23bn (H1 2022: £1.18bn) as a result of an increase in the active customer base and net customer service revenue up 8% to £816m (2022: £754m)
- Margin up 9% to £808m (H1 2022: £743m) due to growth in active customer base of 7% driven by new business areas: B2B, SMARTY and 5G Home
- B2B customer base increased by 86% y-o-y, reaching the 500K customer milestone
- SMARTY base grew by 36% y-o-y
- 5G Home base increased by 174% y-o-y
- Active customer base up 7% or 661k y-o-y bringing the total to over 10.5m (H1 2022: 9.9m)
- Contract customers up 6% y-o-y to 8.8m (H1 2022: 8.2m)
- Prepaid customers up 8% y-o-y to 1.8m (H1 2022: 1.7m)
- Wholesale margin increased 15% y-o-y to £61.5m (H1 2022: £53.5m), due to iD Mobile’s growth in customer base
- Opex has increased by 19%, largely as a result of inflationary pressures
- These increased costs have outstripped margin growth, so EBITDA has declined 19% to £163m (H1 2022 Comparable EBITDA: £201m)
- Reported Capex spend down 18% to £275m a result of Cellnex funding passive infrastructure of new sites. Capex spend predominantly focused on meeting regulatory requirements including SRN and High Risk Vendor swap outs (H1 2022: £334m)
- Reported EBITDA less Capex has decreased to -£112m (H1 2022: -£73m)
Enhancing customer experience and preparing for the future
- Announced deal with Vodafone to create best-in-class mobile telecommunications network for coverage and reliability, transforming customer experience
- Three’s network carries 29% of the UK’s mobile data traffic (Enders analysis) supporting average data usage per customer per month of 24.4GB, up 17% y-o-y
- 5G is now live across more than 4,400 sites in over 610 towns and cities, with 61% outdoor coverage
- Retained Ookla recognition as the UK’s Fastest 5G Network (Q1-Q2 2023) for the fifth consecutive time, with the fastest median download speed of 265.75Mbps
- Three Business reached a milestone of half a million customers
- Transformed customer offering, with flexibility to customise individual plans following roll out of IT transformation programme and launch of ‘Three Your Way’
- Extension of partnership with Currys’ award-winning mobile virtual network operator (MVNO) iD Mobile
- SMARTY has once again been recognised as a Which? Recommended Provider of the Year for Mobile Networks in 2023, for the third year running
- Three UK, along with EkkoSense and CBRE Data Centers, was awarded the ‘Special Contribution to Improving Energy Efficiency’ at the Data Centre World London Awards 2023
- Continued to bolster and grow Three’s Loyalty platform, Three+, saving customers £5.4M this year through our partnerships with Caffe Nero, Cineworld and Uber Eats
- Continued work on the UK’s Shared Rural Network (SRN) programme, which will transform connectivity for residents and businesses across the UK
- Partnered with leading mobile data specialist, Jola, to develop and launch a range of competitive unlimited Business SIMs specifically designed for the reseller channel
- Launched 4G and 5G on eight Transport for London underground stations, including Camden Town, Mornington Crescent and Notting Hill Gate
Supporting colleagues, customers and the community
- Ongoing cost-of-living support for customers, including:
- SMARTY social tariff – providing access to a £12/month plan with unlimited data, calls and texts, and superfast 5G
- Through the Good Things Foundation, 126,000GB of data so far this year has been donated to connect over 5000 disadvantaged people
- Our Reconnected programme has seen over 1700 old devices received year to date. Those usable devices will be given to disadvantaged people along with six months of Unlimited connectivity on Three’s network
- Support for colleagues during cost-of-living crisis:
- Across the wider business, all staff earning less than £30k per annum have received a one-off cost of living payment of £500. Hourly base salary for retail staff has increased on average by 12% since H1 2022; average pay increase across head office staff of 7.4% since H1 2022
- Successful charity partnership with Samaritans with ongoing alignment on CSR campaigns, including a joint campaign with Chelsea Football Club ‘Talk More than Football’, which encouraged football fans to talk about their mental health
- Launched IT learning sessions for over-75s across entire UK store network in order to improve digital skills
- Provided over £50k worth of connectivity to SMEs in Manchester and Birmingham as part of Three Business support for regional businesses
- Ranked in The Times Top 50 Employers for Gender Equality 2023 for its commitment to addressing gender inequalities in the workplace.
Robert Finnegan, Chief Executive of Three UK, said:
“We have successfully grown the business in the first half of the financial year and I’m proud that we have added to the customer base and delivered an increase in margin. I’d like to take this opportunity to thank all my colleagues for their hard work and ongoing commitment to the business.
“While the ongoing rollout of 5G is a success, we have been clear that we are now at an inflection point. As strong connectivity continues to be critical to how we live and work, we’re planning for the future. Our EBITDA continues to be below our capital expenditure, which is unsustainable going forward.
“In June we announced an agreement with Vodafone to merge our businesses. This marked a significant step in our efforts to create a business that will build the UK’s digital future and create a leading 5G network in Europe. Not only will it create a best-in-class network for coverage and reliability, it will also provide the necessary scale to invest, grow and compete, as well as drive economic growth, innovation and jobs across all parts of the UK.”
– ENDS –
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