EE – the confusingly-named umbrella company which includes operators EE, Orange, and T-Mobile – saw its service revenue drop by 2.6 per cent year-on-year in Q4, 2012, according its end-of-year results.

 The operator added 201,000 post-paid subscriptions in Q4, down from 313,000 in Q4, 2011– suggesting that it hasnt seen much, if any, uplift from being the only UK company to offer 4G, although it did see a slight peak in new subscribers in Q3, up to 250,000, when it launched its 4G network.

EE didnt break out specifically how many of its customers were on 4G, although it did reveal that Orange and T-Mobile customers who make the move to EE represent an ARPU (Average Revenue Per User) increase of around 10 per cent – not surprising, given the price of its 4G tariffs. 

The results were more specific regarding its corporate customers – more than 10 per cent are currently trialling or using 4G, apparently, and a quarter of new SME (Small and Medium Enterprise) customers are opting for 4G.

But Steven Hartley, principal analyst at Ovum, believes that the lack of information on this front is representative of the challenges EE still has to face.

“It is what the results don’t say that seems most telling,” says Hartley. “The lack of LTE customer numbers is unsurprising. The official line is so as not to impact the on-going spectrum auction. However, experience suggests that phrases such as solid early 4G momentum cover all manner of sins. Or to put it another way: if customer uptake was far ahead of expectation, then we would hear about it. We therefore have to conclude that uptake has not been spectacular. That doesn’t make it a disaster, just not necessarily fully optimising its monopoly position.

“EE has everything in its favour for LTE to be a success: a market starved of high-speed mobile broadband, but high smartphone adoption and data usage; an LTE monopoly; rapid LTE coverage deployment; and a wider range of compatible handsets at launch than any other LTE operator. 

“Therefore, unspectacular LTE uptake will be due to brand and pricing. EE’s decision to use its new brand has been much discussed and may be out of its hands if the touted IPO means Orange and T-Mobile will have to disappear from the UK. Therefore, EE must not underestimate the importance of tariff strategy in seizing its first mover advantage.”

On a more positive note, 52 per cent of EEs customers are on post-paid contracts, compared to 48 per cent a year earlier. Thats good news for the operator, as post-paid customers deliver five times more ARPU than pre-paid, according to these results. Data was another nice earner for EE, contributing to 4Gs increased revenue and making up 34 per cent of total ARPU, compared to 24 per cent the previous year.

EE also revealed that smartphone adoption among its post-paid users is up to by nine percentage points year-on-year, to 78 per cent. 94 per cent of new post-paid customers, meanwhile, opted for a smartphone, up six percentage points.