Mobile operator Three Ireland says it is gearing up for a period of growth, after the company reported increases in its earnings and customer numbers despite a slight reduction in its overall revenues.
The figures for Three are contained in the annual results of Asian conglomerate, Hutchison Whampoa, which reported its numbers to the Hong Kong stock exchange on Thursday morning.
The figures show that, while overall revenues fell by 2 per cent to €591 million, the company’s Ebitda (earnings before interest, tax, depreciation and amortisation – a standard financial metric) was up 18 per cent to €200 million.
The company outpaced the market for growth in its active customer base, which was up 7 per cent, almost double the rate of growth for the sector in the State as a whole. Three’s market share rose last year from 34 to 35 per cent.
Three Ireland says it now has an active customer base of 2.2 million. It reported a churn rate (the rate at which subscribers leave for other operators) of 1.1 per cent, which is also below the industry average.
Average revenue per active user fell about 8 per cent to €15.35 for prepay users and was €23.23 for monthly bill pay customers. Three blamed the decline on lower roaming revenues, as the full-year effects of a European Union restrictions kicked in.
It also blamed lower mobile termination rates, the fees operators pay each other for connecting calls on each other’s networks.
It said its improved earnings were down to financial "discipline". The group announced it had reached its target of taking out more than €100 million per year in annual expenses. That target was set when it acquired O2 Ireland in 2014 and set about combining it with Three.
"We are reaching the end of what we expected [in terms of its latitude to take out costs]," said Robert Finnegan, chief executive of Three Ireland.
“As we come out of that programme, what you will see now is growth. We are growing our share, our churn is low and we are signing up customers.”
He said he was happy with the group’s performance in a “flat” market, and highlighted the financial strength of its Hong Kong parent, which has a market capitalisation of about 318 billion Hong Kong dollars (€35 billion).
Mr Finnegan said Three would roll out 5G services in Ireland by the end of this year or early next year, a move that would allow it to compete better against fixed-wireless broadband services.
“5G handsets won’t be available until the end of next year. But 5G is also an opportunity for rural areas to get high speed broadband, and we see ourselves launching services to compete by the first quarter of next year,” he said.
