O2 adds 206,000 new contract customers in Q3 but revenues slide


Operator’s mobile base hits 22.5 million customers with over 200,000 contract additions, but revenue falls by more than five per cent in the quarter

O2 added 206,000 contract customers in Q3, but saw revenues for the three month period fall by over five per cent. The operator’s total mobile base now stands at 22.5 million customers.

The contract additions in the quarter resulted in a year-on-year increase of 127 per cent. In the first nine months of the year, O2 added 679,000 contract customers – up 155 per cent from a year ago.

It’s contract base now stands at 11.6 million customers, which makes up 52 per cent of its total mobile customer base up three per cent year-on-year.

O2 did however lose 95,000 prepay customers in the quarter, but this was a marked improvement on EE’s prepay numbers after it reported a loss of 393,000 prepay customers in Q3. O2’s prepay base now stands at 10.9 million customers.

Total revenue in the quarter was £1.422bn, down 5.4 per cent year-on-year. Total revenue for the first nine months was £4.248bn, down 5.6 per cent from a year ago.

Mobile service revenues for the quarter reached 1.244bn, down 9.6 per cent cent year-on-year. In the first nine months of the year, they reached £3.676bn, down 8.7 per cent year-on-year in the quarter.

Contract churn was 1.1 per cent for Q3 and one per cent for the first nine months of the year – a reduction of 0.1 percentage points in both cases. Total churn for the quarter was 2.7 per cent, down 0.4 per cent year-on-year. For the first nine months of this year, the figure stood at 2.8 per cent, a reduction of 0.2 per cent from a year ago.

Smartphone penetration was 44 per cent at the end of September, up eight per cent from the same period last year. O2 said this was driven by the success of its On&On smartphone tariffs. Nearly 89 per cent of contract handset sales in the first nine months of this year were smartphones.

Total ARPU in Q3 was €22.9, up 50c sequentially but down 20c from the same quarter last year. Contract ARPU rose 40c from Q2 to €35.50, but this was down €1.50 from a year ago. Prepay ARPU rose 20c sequentially to €9.70 but was down 40c from Q3 2011.

The Tesco Mobile joint venture, which is not included in the operator’s total base, added 113,000 customers to push the base to 3.3 million subscribers, up 20 per cent year-on-year. The contract base doubled from a year ago to reach 1.1 million customers.

O2 UK CEO Ronan Dunne (pictured) said: “We’re pleased to have maintained our commercial momentum in Q3, building on our performance during the first half of the year, in what continues to be an extremely competitive market.”