O2 Refresh tariff drives growth for operator in Q3

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Refresh numbers exceed one million as operator triples the total number of customers added compared to the same quarter last year

O2 added 303,000 new mobile customers in the quarter, partly driven by the success of its Refresh tariff. The additions are almost triple the number the operator added in the same quarter a year ago.

More than two thirds (219,000) were new contract customers, up six per cent year-on-year. It is the seventh quarter in a row where the company has added more than 200,000 contract customers in a quarter.

More than half of new contract customers in Q3 chose O2 Refresh, taking the number of subscribers on the tariff to more than one million. Refresh, a tariff that enables customers to change their device whenever they want without penalty, was launched in its stores in April and on its website in July. Contract churn remained below one per cent for the third consecutive quarter.

The additions mean O2’s contract base now has 12.66 million customers, an increase of nine per cent from a year ago.

O2 added 84,000 prepay customers in the quarter to take that base to a total of 10.76 million subscribers, which was down by less than a percentage point from Q3 2012.

It means the operator’s total base now stands at 23.4 million, an increase of four per cent year-on-year. Contract customers accounted for 54 per cent of the mobile base, up two per cent from a year ago. Smartphone penetration grew five per cent to reach 48 per cent.

Revenue grew 3.1 per cent from Q3 2012 to £1.467 billion. It made a profit in Q3 of £374 million, which was a rise of 3.7 per cent year-on-year. Profit margin stood at 25.5 per cent, up 0.2 per cent from last year.

Additionally, the operator has launched 4G in 11 cities and more than 90 surrounding towns across the UK since launching the service on August 29. Indoor population coverage has reached 25 per cent and over the coming weeks, O2 will launch 4G in Edinburgh and Newcastle, as well as towns including Huddersfield and Wetherby.

O2 UK CEO Ronan Dunne (pictured) said: “2013 has been our year of returning to growth and this has been another solid quarter for us. O2 Refresh is helping drive trading momentum and we are a month and a half ahead of our 4G rollout target. These latest results show that more and more customers are choosing to join and stay with us every day.”

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