First-half results from company formed by merger of Orange and T-Mobile show a 9% increase in customer contract renewals
The company that owns the Orange and T-Mobile networks in the UK has paid £543m in dividends to its shareholders so far this year.
Everything Everywhere (EE) said the latest payments mean it had now handed back all of the £1.25bn lent by its owners, France Telecom and Deutsche Telekom, when the company was created through the merger of the Orange and T-Mobile operations two years ago.
Announcing first-half results, EE said it had paid out £250m in a special dividend in June plus a further £293m in March.
Its chief executive, Olaf Swantee, said underlying earnings in the six months to 30 June were down 1.3% to £673m on the same period last year as the company invested in retaining an unusually high number of customers whose contracts are coming up for renewal.
There was a 9% increase in contract renewals, with 150,000 customers, many of them coming out of two-year deals, seeking new terms and a phone upgrade. The company added 150,000 net new contract customers, but continued to shift reliance away from less lucrative pay-as-you-go subscribers, whose numbers fell by 313,000.
Contract subscribers spend on average five times as much as pre-pay, and now account for half of EE’s customer base.
Service revenues – from calls rather than handset sales – fell 1.8% to £2.989bn, although without the impact of regulator-imposed price cuts they rose 3.1% in the six months to 30 June.
Swantee, who arrived just under a year ago tasked with speeding up the merger, said IT, warehouse and point-of-sale systems in shops had now been fully integrated, and nearly 1,400 masts decommissioned as the Orange and T-Mobile networks have integrated. The company is now on track to make £3.5bn in merger savings by 2014.
He welcomed the publication on Tuesday of the rules for the forthcoming 4G auction, which will release the spectrum needed to speed up mobile internet connections, but urged regulators to approve EE’s application to use spectrum it already holds to launch its own 4G service ahead of competitors.
The company has already upped its expenditure on the network, and is understood to have already installed enough 4G equipment to roll out the service in a number of the UK’s major cities. It has committed to spending £1.5bn over three years upgrading for 4G.
“We are confident that we can bring 4G to the UK by the end of this year, all we need now is the licence liberalisation,” said Swantee.
EE is also selling a chunk of its spectrum, valued at £450m by analysts, which its three rivals, Vodafone, O2 and Three are understood to have submitted bids for. If EE does not sell the spectrum before the 4G auction it must hand it back to the telecoms regulator, Ofcom.
“We are very confident that we can complete the sale process before the auction starts,” said Swantee.
Orange pulling out of sponsoring the book prize is good news for film (it sponsors the Baftas) but bad news for authors
On Wednesday night, the young American writer Madeline Miller won the 17th Orange prize for fiction with her novel The Song of Achilles. It is her first book, and to win the Orange will put rocket boosters under her career. Shame then, that only a few days earlier, Orange announced it had taken the strategic decision to pull out of sponsoring the prize. Good news for film (it sponsors the Baftas). Bad news for books, authors and publishers.
For the chosen few, literary prizes make a career. It is not only the money, it’s the profile. No two people ever agree about a novel, and tales of fisticuffs on the judging panel are the stuff of successful sponsorship. Confining an award to women writers in English is more contentious still. But critics like AS Byatt who famously called the Orange award “sexist” might consider the impact on sales of the Bessie. Four of the top five bestsellers of recent serious fiction won the Orange. Only Booker winner Yann Martel’s Life of Pi has done better. Ever since 1996 when Orange teamed up with agents and publishers to provide an alternative to the male-dominated Man Booker prize, a stream of gifted winners have had the chance to devote themselves full-time to their work. Many, like Helen Dunmore, Ann Patchett, Chimamanda Ngozi Adichie and Andrea Levy, have gone on to film contracts, other book prizes and the kind of mass readership that gets them into the Waterstone’s window. “Prizes give one novelist a chance,” Linda Grant (winner in 2000) wrote recently. “A chance to go on writing, to produce a body of work, to do so without financial anxiety.”
At the awards ceremony this week, one former judge, Martha Lane Fox, picturesquely dismissed Orange as turnips. Kate Mosse, who founded the prize, insists talks with possible successor sponsors are already under way. But the PR and marketing departments who choose where to get the best value for their sponsorship buck tell a different story. The Bafta awards, with their famous-from-TV stars and edge-of-the-seat presentation, guarantee their sponsor hours of primetime TV. The Man Booker prize might get a section on Newsnight Review. Sponsoring women writers just about makes it onto the news channels.
If literature is beginning to struggle to find commercial sponsorship, the Arts Council might dig deeper. But although its support for literature has increased recently, it is still running at just 2% of its total budget, while its principal focus is on poetry, translation, and black and minority ethnic writing and publishing. Of course, they need the support too. The uncomfortable truth is that all literature, especially new literature, is becoming an unsponsorable commodity – unlike mass-audience, multi-platform film, it is a luxury enjoyed in solitude.
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