O2 Q3 revenues drop by 5.3 per cent but contract customers up

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O2 posts revenue losses of 5.3 per cent to £4.42 billion in Q3 2011, as overall ARPU drops by 6.7 per cent

O2 has posted revenue losses of 5.2 per cent year on year to £4.42 billion for the third quarter of 2011 and also saw overall ARPU drop by 6.7 per cent in the same period.

Contract churn for the period remained flat year on year at 1.1 per cent, while overall churn for the first nine months of the year was up by 0.4 per cent year on year to sit at 3 per cent.

Mobile voice traffic was also down – by 11 per cent in the quarter, mainly driven by a lower prepay customer base according to the company.

It was also bad news on the total ARPU front, which fell by 6.7 per cent year on year for the quarter, however O2 said had termination cuts not been enforced, this would have only fallen by 2.8 per cent.

Voice ARPU was the biggest faller – dropping 16.3 per cent in Q3 but data ARPU grew by 7.9 per cent in over the quarter – up by 5.4 per cent in Q2 2011.

Despite the drop in revenues and ARPU O2’s mobile customer base reached 22.2 million at the end of the third quarter – an increase of 1 per cent year on year.

This was mainly driven by the contract segment which now accounts for 48 per cent O2’s total customer base. Contract mobile net additions reached 91,000 in Q3, bringing total contract adds for the first nine months of the year to 266,000.

There was also an increase in smartphone demand – smartphone penetration increased to 36 per cent and smartphone sales accounted for nearly 90 per cent of all sales and upgrades in Q3 according to the operator.

Speaking about the results O2 CEO Ronan Dunne (pictured) said: “We’ve had a solid quarter against the backdrop of an extremely tough economy.

“We have delivered market leading profit while still achieving market leading customer satisfaction and industry low churn.”

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