Three UK revealed its quarterly financial performance this week, showcasing an increase in revenue and margin while reiterating its intent for a potential merger with competitor Vodafone.
The telecommunications company disclosed a notable 9% surge in both revenue, climbing to £664 million, and margin, reaching £424 million. This growth was attributed in part to a rise in its customer base, with active customers increasing by 3% overall and active contract customers by 6%.
Despite the positive revenue trend, Three UK grappled with ongoing financial challenges. Economic conditions, characterized by rising costs and inflation, posed hurdles, contributing to the company’s continued struggle to cover all expenses. The quarter concluded with capex losses totaling £130 million.
Looking ahead, Three UK aims to bolster its customer base, particularly in sectors like business services, as outlined by CEO Robert Finnegan. Finnegan acknowledged the company’s solid start to the year but underscored persisting challenges, emphasizing the unsustainable nature of their negative EBITDA less capex.
The company’s performance in 2023, detailed in its annual report released in March, reflected a decline in EBITDA by 34% year-on-year, alongside a reported EBIT loss of £117 million, attributed to investments in network infrastructure and connectivity enhancement across the UK.
Finnegan reiterated the necessity of the proposed merger with Vodafone, emphasizing the importance of scale for investment and competition. The merger, currently under scrutiny by the Competition and Markets Authority, awaits the outcome of the second phase of investigation expected in September.
As Three UK navigates its financial landscape, its strategic moves to bolster revenue streams and enhance market competitiveness remain under close observation, especially in the context of its potential merger with Vodafone.
