Three UK reports FY17 results

Three UK today announces its full-year results for the 52-week period ended 31st December 2017.

Operational Highlights (vs FY16)

• Active customer base grew 10% to 10m customers due to Contract and Prepaid growth
• Contract handset churn at lowest ever level at 1.1%
• Usage per customer of 6.8GB per month
• 82% of customer base using 4G and 68% of data usage on 4G network
• Best ranked mobile network operator Net Promoter Score of +19
• Wuntu passed 1 million customers
• Substantial investment in digital transformation of the business

Financial Highlights

• Total revenue up 7% to £2.4bn
• Total margin up 3% to £1.5bn due to increased customer base, generating Average Margin Per User of £12.04
• CAPEX increased by 30% to £459m largely due to investment in the transformation of the network and IT systems
• EBITDA down 2% at £702m and EBIT down 12% to £437m as a result of investment in the transformation of the network and IT systems

Operational developments

Growing customer base and delivering customer-centric propositions

• Excellent customer service record, with the fewest complaints of any mobile network operator.¹
• Maintained leadership position on overseas roaming by extending Go Roam offer to 71 worldwide destinations allowing our customers to use their phones abroad at no extra cost in more than 80% of destinations they travel to
• Launched Go Binge, an innovative, open platform for customers on selected plans that removes data charges on streaming services including Netflix, Apple Music, TV Player, Deezer and SoundCloud

Delivering market-leading connectivity

• Remained the UK’s leading provider of data as usage per customer grew by 7% to 6.8GB per month, over 3.5 times more data than the average UK consumer
• Indoor population network coverage now at 98.5%, up from 95% year on year

Strategic developments supporting our drive to be the best loved UK brand by our customers and our people

• Increase in CAPEX of £107m reflects digital transformation – acceleration in investment in brand-new IT and core network as well as new transmission and data centres to provide customers with faster speeds, enhanced security, better customer service and improved experience
• Delivering on a multi-brand go-to-market strategy, with the launch of our SIM only sub-brand SMARTY
• Developed strategic partnerships to access new product and customer segments such as with gaming company Razer for specialised devices and AT&T to use our network for localised IoT services
• Launched innovative new products like our customer loyalty and rewards app, Wuntu, which has now reached 1 million active users
• Completed acquisition of UK Broadband Limited in May, operating a high speed wireless home broadband solution under the Relish brand in Central London and Swindon

Dave Dyson, Chief Executive of Three UK, said:

“Our results reflect Three’s ongoing commitment to growth and becoming the best-loved brand by our customers.

“I am pleased to have passed the 10 million customer milestone. Over the course of last year, we have strengthened our market-leading Go Roam proposition, launched Go Binge, our innovative unlimited streaming service, as well as our SIM-only, online-only sub brand SMARTY.  In addition, we have rapidly developed Wuntu, our customer loyalty and rewards app, which is highly rated and has already exceeded 1 million active users.

“At the same time, we have invested significant time and money in the future growth and scalability of the business.  Our digital transformation is a programme of work that will significantly enhance customer experience, employee experience and cost efficiency.  Investment in spectrum, next generation network and IT underpins the opportunity to deliver improved results over the long term.

“To deliver such a degree of strategic change whilst maintaining strong profitability is testament to the hard work and dedication of the thousands of staff across the Three UK business, and puts us in a strong position to deliver long term growth.”

¹ As per Ofcom’s latest Q3 2017 Telecoms and pay-TV complaint report https://www.ofcom.org.uk/__data/assets/pdf_file/0033/109689/telecoms-pay-tv-complaints-q3-2017.pdf

Click on the image to view Three UK reports FY17 results