BT 2016 Annual Report Download - page 75

Overview The Strategic Report Governance Financial statements Additional information
79
Revenue for the two months since acquisition was
£1,055m. This consisted of mobile service revenue
of £913m, fixed and wholesale revenue of £89m and
equipment sales of £53m.
This also includes revenue of £17m which is internal, reecting
trading with other lines of business within the group. Monthly
mobile ARPUs in the period were £26.7 for postpaid customers,
£3.9 for prepaid and £18.6 on a combined basis.
Operating costs were £794m giving EBITDA of £261m,
a margin of 25%.
Capital expenditure was £111m as we extended 4G coverage to
over 96% of the UK population. Preparation for the Emergency
Services Network contract continued in line with agreed
milestones.
Operating cash ow, which excludes interest and tax, was £310m
benefiting from the timing of working capital.
Financial performance
From 29 January to 31 March
2016
£m
External revenue 1,038
Internal revenue 17
Total revenue 1,055
Operating costs 794
EBITDA 261
Depreciation and amortisation 176
Operating profit 85
Capital expenditure 111
Operating cash ow 310
Over the coming year we plan to further integrate the new EE line
of business into the group, in line with the reorganisation that took
eect from 1 April 2016, and begin to realise the revenue and cost
synergies associated with the acquisition. We also plan to broaden
and deepen our customer relationships by:
• improving the customer experience;
• extending 4G coverage and aiming to remain the UK’s best quality
mobile network;
• progressing the build phase of the Emergency Services Network
contract, working closely with TSO; and
• launching a range of combined mobile, fixed‑line and TV products.
Key priorities
Transform our costs
Since EE was formed in 2010 it has gone through a process of
transformation as the legacy Orange and T‑Mobile businesses were
combined. We’ve removed duplication from the mobile network,
shops and support functions to drive profitability. We expect to
continue to drive eciencies as we integrate EE’s business into the
wider group and share our ideas, experience and methodology.
Invest for growth
We have the best mobile network in the UK, having
been named number one network by RootMetrics and
recognised as the UK’s fastest network by Speedtest.net.
We’ve made 4G voice calling more widely available, bringing it to
Manchester and Birmingham. The increased network coverage and
resilience required for the Emergency Services Network contract
will also benefit consumer and business mobile customers.
Deliver superior customer service
Improving customer service is a key priority. While we have
made steady progress, there is still room for improvement,
as shown by the number of complaints our customers
make to Ofcom.
In the period we accelerated work on projects across four key areas:
• Call centres. Transforming service for our customers, reducing
complaints and customers’ propensity to call;
• Self service. Increasing take‑up of the My EE app and improving
online service;
• Shops. Improving service and providing more digital capabilities
in store; and
• IT. Improving customer‑facing IT systems.
As part of our ambition to oer the best mobile customer service
in the UK, we’ve started the ‘Omnichannel’ initiative, to provide a
consistent experience for our customers, regardless of how they
interact with us. This will enable us to give customers better, more
relevant oers, follow up on potential sales quickly and eectively
and support customers more proactively.