Smartphones help Everything Everywhere biz

LONDON, UK: Everything Everywhere, the Deutsche Telekom-France Telecom joint venture that is Britain's biggest mobile operator, cemented its customer base last quarter with the help of attractive smartphones.

The company increased by 8 per cent its number of contract customers - who are more profitable for operators than pay-as-you-go users - and said on Thursday they now made up 45 per cent of its base, up from 41 per cent a year earlier.

Chief Financial Officer Richard Moat said subsidised smartphones such as Apple's iPhone, Research in Motion's BlackBerry and HTC phones were encouraging customers to make one- or two-year commitments.

"People increasingly see the value of being able to use the Internet on the move," he told journalists on a conference call.

Smartphones accounted for 84 per cent of contract connections in the quarter, the company said.

Deutsche Telekom shares rose 0.6 per cent and France Telecom rose 0.9 per cent by 0936 GMT, outperforming a flat European telecoms index.

Everything Everywhere's mobile service revenue rose just 0.4 per cent to 1.55 billion pounds ($2.57 billion), as the number of pay-as-you-go customers declined by 6 per cent.

Rivals Vodafone and Telefonica's O2 UK have yet to report first-quarter figures. In the fourth quarter of last year, they increased mobile service revenues in Britain by 7 per cent and 8 per cent respectively.

Everything Everywhere's Chief Executive Tom Alexander said in a statement the company was confident of achieving a core profit margin of at least 25 per cent in 2014, and said it was ahead of plan in delivering 3.5 billion pounds of cost savings.

The joint venture with almost 28 million customers was formed last year to help its parents compete in the cutthroat UK market. Customers can roam across both voice networks and will soon be able to use both networks for data too.