Dunne confident after strong O2 Q4 figures


Having missed the January 1 deadline for its 3G roll out, Dunne said it has agreed the new deadline with industry regulator Ofcom, which had threatened to fine it £40 million.

Dunne also said O2 was not concerned at being left out of network sharing deals struck by rivals. O2 shares masts on a site-by-site basis anyway, said Dunne, and rivals are already finding the complexity of full-scale network sharing difficult to manage.

He said: “Vodafone and Orange found network sharing is more complex than they thought. We are proactive in site sharing and more than happy with our ability to control expenditure. There is no benefit to some of the more complex approaches.”

Dunne also drew attention to O2’s broadband sales, which has passed 100,000 subscribers. Dunne said O2 is targeting 77 per cent population coverage by the second half of the year.

He said the broadband additions, alongside the 483,000 customers it signed in Q4 last year, showed the network “firing on all cylinders” as it looks to offer more than straight mobile.

“We came into broadband with a differentiated offering on speed and service. We are a mobile business, but also a part of Telefonica, and a big part of the overall group vision is to go beyond mobile. Our UK mobile service plays a big part in that,” said Dunne.

O2 UK added a record 276,000 contract customers in the quarter, spurred largely by the Apple iPhone, said Dunne. It also said iPhone ARPU was 30 per cent higher than that of average contract customers and claimed 60 per cent of iPhone shoppers defected from rival networks.

He also explained the Apple deal is a multi-year exclusive that also covers forthcoming Apple handsets, and said the direct channels will take the device before the indirect.

“We will put it into all direct channels as soon as possible. We will work with Apple on the iPhone distribution model, but the primary focus is to do significant proportion of business direct across all channels. We will focus on the direct channels in the first instance,” said Dunne.

Its Q4 results showed annual UK revenue growth of 18.7 per cent; 7.8 per cent for the quarter.