12 February 2016

EE hits 2015 targets; delivers 14m 4G customer base, 28.2%+ adj. EBITDA1 margin; market leading revenue; remains Europe’s largest 4G operator.

Full Year highlights:

• Total network connections grew 1.8% to 31.5m (Q4 2014: 30.9m), with Q4 postpaid customer net additions of 141k.

• Adj. EBITDA grows 12.1% year-on-year (yoy) to £1,781m, a margin of 28.2% (FY 2014: 25.1%), due to favourable trading mix.

• Retained mobile service revenue market leadership. Operating revenue steady at 1.1% yoy excluding regulation, while 0.6% down including the impact of regulation.

• Maintained network leadership through sustained investment and innovation.

Review of the year:

EE reached its 2015 targets with more than 14m 4G customers at the year’s end, achieving strong postpaid net additions, with Q4 customer growth of over 140k. A robust Sim-only performance in the face of a subdued smartphone market contributed to reduced costs, driving improved margins.

Continued investment in network and 4G leadership extended 4G coverage2 to 95%, supporting growth in the total number of 4G corporate accounts to over 9,100 (+30% yoy). The Government award of the Emergency Services Network (ESN) contract will see EE expand its network capability, and through 4G LTE provision, improve the communications capability of the UK’s emergency services. The ESN will require new investment and increased operating costs from 2016, with revenues not anticipated to start until H2 2017.

2015 operating revenue remained steady at just over £6bn with underlying revenues up 1.1% yoy, but down 0.6% when including regulatory impact. Regulatory pressures are expected to increase through 2016, with higher spectrum licence fees as well as reduced roaming rates and mobile termination rates all expected to impact financials from 2016 and beyond.

4G subscribers almost doubled in 2015, with a strong uptake of mobile broadband. Postpay churn remained low at 1.1%, as customer satisfaction metrics continued to improve.

Marc Allera, CEO EE, commented, “2015 was an exceptional year for EE, as we met and exceeded 4G targets, won multiple awards for our network performance, and improved our customer satisfaction scores. As part of BT, we’re entering the next chapter of EE’s journey, and look forward to a phenomenal opportunity to innovate for the benefit of our customers, while continuing to build and enhance the UK’s digital infrastructure.”

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