O2 UK subs up, group revenues down


O2 UK customer additions increased eightfold during Q2, compared with the same period last year.

O2 UK added 274,571 customers in the quarter, more than eight times its additions during Q2 2007.

It added 137,596 contract customers in the quarter, 80.8 per cent higher than in Q2 2007. It put the surge in contract sales down to the iPhone – and other high-end handsets. First half contract additions totalled 343,981.

Contract customers comprised 38.3 per cent of O2 UK’s total base, up from 35.8 per cent in June 2007. O2 pointed to the maturity of the UK prepay market and the migration of prepay users to contract following the intorduction of SIM-only deals.

The network’s total mobile customer base now stands 18.7 million, excluding Tesco Mobile customers, representing growth of five per cent year-on-year.

Prepay customer numbers grew by 136,975 during the quarter, compared with declines of 42,240 in Q2 2007 and 185,233 in Q1 2008, to reach a base of 11.5 million.

Contract churn fell to 1.4 per cent in the quarter from 1.8 per cent in the same period last year and 1.5 per cent in Q1 2008, driven by retention activity and handset upgrades.

ARPU was up two per cent from the same period last year. ARPU for the first half was £24.11, representing year-on-year growth of 3.7 per cent. Data ARPU for the first half was £8.27, representing year-on-year growth of 10.8 per cent.

O2 UK’s DSL broadband service registered 62,800 net additions in the quarter, and 123,510 in the first half, leaving the total broadband customer base at 194,220 at the end of June.

First half revenues for O2 were £2.75 billion, an increase of 11.8 per cent year-on-year. Operating income before depreciation and amortization (OIBDA) for the quarter rose 14.1 per cent year-on-year, impacted by restructuring charges taken in the second quarter 2007. Half one OIBDA totalled £694.1 million 

Meanwhile, O2 parent company Telefonica reported a 48 per cent decline in year on year operating income for Q2. Its total base across the UK, Ireland, Germany, Spain, Czech Republic and Slovakia is now at 43.8 million, with one million added in Q2.

Across the group, non-SMS data revenue was recorded at €420 million (£330.9 million) in the first half, up 39.8 per cent year-on-year.

Telefonica Europe recorded a decline in OIBDA of 48.2 per cent year-on-year. For the first half, reported OIBDA was €2,033 million, a year-on-year decline of 34.4 per cent.