O2 UK base and revenues jump


Telefónica O2 UK added 292,061 customers in the third quarter and 686,000 in total so far in 2009, and also saw revenues jump 4.3 per cent in the year-to-date and two per cent in the quarter. It third quarter profit suffered a 3.5 per cent slump, however, due to a €28 million restructuring charge in its customer service and marketing departments.

It is the only UK network operator to report revenue growth in the third quarter. The company claimed 60 per cent of all net additions in its European markets (the UK, Germany, Ireland, Czech Republic and Slovakia).

In the UK its 292,000 net additions compared with 321,000 additions by Vodafone, Orange and T-Mobile combined in the quarter.

O2 UK’s total mobile customer base, excluding MVNO partner Tesco Mobile, stood at 21 million lines at the end of September, up 5.7 per cent year-on-year. Its quarterly net additions were up 15.8 per cent sequentially.

It signed 312,323 contract customers in the quarter, marginally down on its record showing in the same period in 2008. It shed 20,262 prepay customers in the quarter.

Its total 2009 net additions were up 22.5 per cent on 2008.

Of O2 UK’s base, 44.5 per cent of customers (9.3 million) were on contract at the end of September 2009, compared with 41.3 per cent in September 2008.

Revenue was €4.871 billion for the first nine months of the year and €1.677 billion in the third quarter, up 4.3 per cent and two per cent year-on-year respectively, allowing for the fluctuation in local currency.

Profit (OIBDA) was €1.219 billion in the first nine months of 2009, a 1.6 per cent year-on-year growth in local currency. Profit in the quarter declined 3.5 per cent to €421 million, in large part because of a 28 million restructuring charge.

Telefónica Europe chairman and chief executive Matthew Key (pictured) said: “Telefónica O2 UK maintained its market leadership, yet again outperforming its competitors in a more competitive environment.

“O2’s ongoing success in the UK is clearly down to our strategy of putting the customer first – our levels of churn are the lowest in the market and the popularity of our propositions such as ‘Simplicity’ and our wide range of high-end devices continues to pay dividends.

“The use of mobile internet is also driving growth as increasing smartphone numbers are impacting on data ARPU figures – which rose 5.1 per cent in the third quarter.”

O2 UK saw a data ARPU rise of 5.1 per cent in Q3, reflecting usage of the mobile internet. It claims a 20-fold increase in data traffic on its network in the last year.

Telefónica Europe, meanwhile, reported revenues of €10.1 billion in the year to September, up 1.4 per cent in constant currency terms. Profit increased

4.6 per cent to €2.9 billion, with Telefónica O2 Germany the main contributor to this growth.  Operating cash flow amounted to €1.7 billion, an organic increase of 16.1 per cent in the first nine months of 2009

Telefónica Europe’s total customer base was up eight per cent at 48.6 million, with 895,000 mobile customers added in the third quarter and nearly three quarters of all new customers signed to contract.

Key said: “Telefónica Europe has again delivered impressive results in a fast changing environment, with top line organic growth accelerating thanks to our unwavering focus on the customer and maximising the efficiency of our operations. With our businesses in both the UK and Germany now outperforming, we are seeing further evidence that the rebalancing of our European business portfolio is continuing to bear fruit.  

“Despite the economic downturn, we have continued to invest in the market in order to drive growth. Over the past 12 months, we have taken nearly 60 per cent of all mobile net additions across our markets.  We have established O2 as the home of the smartphone and are now seeing firm evidence  of mobile data taking off, with more than 5 million of our UK customers regularly accessing the internet on their phones and a 20-fold increase in data traffic on our network in the last year.”