Orange and T-Mobile revenues hit by mobile fee cuts
Everything Everywhere, which operates the Orange and T-Mobile brands, has reported a fall in its revenues due to fee cuts imposed by regulators.
The group announced a 2.5% year-on-year fall in service revenues to £1.5bn for the first quarter to 31 March.
The drop reflected the impact of cuts in the fees mobile operators can charge each other. This loss amounted to £80m.
Excluding the impact of these fee cuts Everything Everywhere's underlying service revenues rose 2.9%.
Mobile phone operators levy charges called Mobile Termination Rates (MTRs) when non-customers use their networks - charges that are passed on to consumers.
In March 2011, regulator Ofcom said it wanted these reduced from around 4p per minute to 1p or less by 2014.
The group, a joint venture between France Telecom and Deutsche Telekom, has about 27 million UK customers and is in the process of merging the Orange and T-Mobile phone networks.
It also plans to roll-out a high-speed 4G network by the end of this year.
The group wants more of its pay-monthly contract customers to migrate to data-hungry smartphones, which are far more lucrative for the company.
A pay-monthly smartphone user is worth five times more than a pay-as-you-go customer, the company said in a statement , and data and messaging now accounts for nearly half of average revenue per user.
It now has 9.23 million smartphone customers on contract.