O2 sees strongest quarterly customer growth in six years

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Operator added 830,000 customers in 2014 to take mobile base to 24.47 million with revenue up from £4.84 billion to £5.3 billion

O2 added 830,000 customers in 2014 after adding 394,000 customers in the three months running to the end of December, its strongest quarterly customer growth in six years.

That takes its total customer base up to 24.7 million, made up of 24.47 million mobile customers, an increase of 830,000 (including M2M) from the end of 2013.

The operator – which is currently subject to £9.2 billion takeover talks with Three owner Hutchison Whampoa – said it had gained more than three times mobile customers than rivals EE (-298,000) and Vodafone (+485,000) combined. It gained 613,000 customers during 2014 (excluding M2M).

It was also O2’s best quarterly contract customer growth for four years, with 291,000 new contract customers joining in Q4, compared with 208,000 additions in Q3 2014.

O2’s pre-paid customer base remained flat at around 10.7 million, while the operator added 217,000 new M2M customers in the year.

O2 CEO Ronan Dunne said: “Our market outperformance has been driven by our relentless focus on our customers. Whether it’s the trust they place in the strength of our network, the service we deliver or the unique experiences we offer, they continue to reward us with market leading loyalty and satisfaction.”

59 per cent 4G coverage

Overall UK revenue increased from £4.84 billion in 2013 to £5.3 billion for 2014, with £1.5 billion generated in Q4. Mobile service revenue was up 2.9 per cent year-on-year (excluding O2 Refresh).

OIBDA totalled £361 million in the quarter, a stable trend of -0.6 per cent year-on-year. As a result, OIBDA margin stood at 23.9 per cent.

O2 also highlighted churn, which stayed stable at one per cent both in Q4 and for the year overall, but ARPU dipped by 8.8 per cent, from £13.93 to £13.63.

Its 4G network now covers 59 per cent of the outdoor UK population, up 20 per cent year on year, with O2 now providing 4G in 370 cities and towns across the country. Capital expenditure amounted to £142 million during 2014, up 17.7 per cent year-on-year.

Telefonica net profit down 

Telefonica, which is trying to offload O2 to Hutchison, saw its annual net profits fall by 35 per cent to €3 billion (£2.2 billion), with operating income down 19 per cent to €15.52 billion.

The group reported full year revenues of €50.4 billion, organic growth of 2.6 per cent year-on-year, with €12.4 billion generated in the final three months of 2014.

Overall, Telefonica has 341 million customers globally, up six per cent year-on-year, including the incorporation of E-Plus in Germany.

Telefonica executive chairman Cesar Alierta said: “The results in the fourth quarter of 2014 represent the culmination of a period of intense transformation that has strengthened the Company, its growth potential and its financial position in just over two years.

“This transformation was carried out from the core of the business, thanks to an intense CapEx effort that has allowed us to adapt to the evolution of our customers’ technological needs which are characterised by a booming data usage.

“For this reason, in 2014 alone, we have doubled the reach of our fibre network to 15 million premises passed and we have reached a 4G coverage of 60% in Europe, while in Latin America this service is already available in 10 countries.”

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