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Three UK finally turns a profit

Eight years on, with a little help from its friends

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Three UK has finally turned a profit in the UK in its eighth year of operation – with some help from a network-sharing agreement with Everything Everywhere, after parent company Hutchison Whampoa reported its annual results.

The figures gain from a one-time substantial benefit of £500m, which sees Three UK gain the use of 3,000 transmission sites, which it says are free of acquisition and future operating costs. This was partly offset by restructuring and other costs of £311m, leaving EBIT of £173m.

Revenue was £1.4bn for 2010, with a 7 per cent fall in postpaid income offsetting a 12 per cent gain in prepay - an overall revenue decline of five per cent.

The network now has 7.23 million punters, with 3.33 million on prepay and 3.898 million on contracts. Prepay subscribers grew by 51 per cent, but contract customers still bring home 88 per cent of the operator's revenue. UK ARPU (average revenue per user) is £8.45 for prepay and £29.36 for postpay, down 16 per cent from last year.

The operator began selling the iPhone last August and now says it sells more than any other UK network.

Three UK, which benefited from an auction designed to keep four operators in the UK market, still has some distance to make up, however. Third-placed Vodafone reported 19.1 million customers at the end of last year, half of whom are on contracts, with a higher ARPU of £37.1 per month. ®

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