O2 Q1 revenues up 5.3 per cent


Revenues rise by 5.3 per cent to almost £1.6 billion year on year added predominantly by strong data use

O2 has posted a year on year increase in revenues of 5.3 per cent to almost £1.6 billion for the first quarter of 2011. Mobile services grew 3.6 per cent year on year to £1.4 billion.

Non SMS data revenues, which grew 34.5 per cent year on year were a “principal factor” for the increase in growth according to O2. Total data revenue grew for the period by 9.8 per cent and represented 43 per cent of mobile service revenue.

Total data traffic was also up – by 45 per cent year on year as customers increased their mobile broadband use.

Mobile voice traffic however, decreased by 4.6 per cent compared to Q1 2010. This was blamed on lower consumption in the prepay market.

O2’s mobile customer base grew four per cent compared to the corresponding period to 22.3 million due, mainly to a strong growth in the contract segment which was up nine per cent compared to one year ago.

The operator said contracts now account for 48 per cent of its total mobile customer base. Contract net additions reached 151,000 due to demand for smartphones with attached data rate plans.

In total smartphones accounted for 82 per cent of total sales and upgrades in the quarter.

Mobile net additions stood at 75,000 – 33 per cent higher than in Q1 2010 but significantly lower than growth in previous quarters, particularly Q4 2010 when net additions stood at over 250,000. O2 says the drop was due to its decision “not to chase volumes”.

Churn grew by 0.2 per cent year on year, reaching 2.8 per cent for the quarter, with contract churn at 1.1 per cent.

O2 chief executive Ronan Dunne said: “We’ve had a solid quarter against the backdrop of an extremely tough economy, fragile consumer confidence and less activity on the high street.

“We’ve performed well against our competitors focusing on profitable growth whilst providing what we believe is the best overall customer experience and doing what we can to help customers through these tough times.”

Meanwhile Tesco Mobile, the joint venture between O2 and Tesco has added 51,000 new customers to its base in Q1 2011, an increase of 24 per cent year on year.

Its total customer base now sits at 2.6 million.