UK mobe network Three's profits hit by IT upgrade costs Mobile operator Three UK reported a fall in earnings before interest, taxes, depreciation and amortisation (EBITDA)* of 2 per cent to £437m for its full-year results – largely due to an IT and network upgrade. Sales went up 7 per cent to £2.4bn for the 12 months ended 31 December 2017 (PDF). Capital expenditure rose 30 per …
In turnover that's just under half the size of 02, which implies that O2 are a sardine.
As for the 20% "profit", see the footnote - that is before the cost of borrowing, tax, and planned writedown of assets. They might not have released the details yet, but for 2016, depreciation was £316m, amortisation was £49m, and interest was £6m a year. Those costs will be roughly similar in 2017, so the £437m EBITDA "profit" converts to a profit before tax of £66m, for a 2.75% pre tax margin.
In terms of return on capital employed (using net assets), they probably got a 1% return for 2017, which is dismal.
This makes me wonder if anyone at El Reg actually reads the things they link to. Both the 3UK PDF and the CKH PDF linked from the article state £437m as the EBIT figure, with EBITDA at £702m. Which is a healthier return.
But with CAPEX at £459m, and another £294m spent buying UKBB there is still a negative cash flow for the year. Which is not ideal....
But mobile broadband... that's not just smartphones. Three got famous by being for the "data-heavy" user, they aren't going to be wandering around much.
And I have both Three (mobile Wifi) and Giffgaff (smartphone) and I don't think either of them are better than the other and not to the point of detriment for either of them.
Because:-
- They are BT or Vodashite
- They give me calls in the USA and Oz from my UK minutes.
- I get 4G at home wheras O2 gives me 3G on a good day and the masts are next to each other.
- When I have had a technical issue, I got to speak to someone who isn't from India (may have changed)
All for under £12/month on a one month rolling contract.
Yes, sometimes their coverage is a bit patchy but overall, I'm pretty satisfied.
They allowed my details to be accessed by a third party via their upgrade system, when said system has no technical need for access to any of said details. (it should pass details entered by the operator to a server which says match or no match, not show the details). This was (reported to me) months after having left them due to no wifi calling / visual voicemail.
Signalwise, they were always great, their helldesk was in India when I had the misfortune of needing to call them.
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