O2 profit growth soars 14pc in Q2 as customer base nears 25m

Ronan Dunne, who led O2 UK for nine years, left in September

Operator adds 199,000 customers in the quarter with contract churn at an all-tim low of 0.9 per cent

O2’s profit growth soared 14 per cent year-on-year in Q2, with the operator adding 199,000 customers in the quarter.

OIBDA (operating income before depreciation and amortization) totalled £374 million, while revenue was up 1.6 per cent from last years to £1.409 billion.

The operator added 199,000 new customers in the quarter. There were 172,000 contract additions (139,000 excluding M2M), growing this base by 6.1 per cent year-on-year to account for 57 per cent of its overall base.

Contract churn was 0.9 per cent, which O2 said was a market-leading all-time low.

It also added 27,000 prepay customers in Q2. It meant the company’s total mobile customer base grew 4.4 per cent from last year to 24.8 million at the end of June.

O2 said customer growth had once again been driven by its Refresh tariff, as well as its customer loyalty programme, O2 Priority.

Over one million Priority offers were redeemed in the quarter. The scheme was strengthened further through a new partnership with Channel 4 allowing customers to get exclusive access to a number of Channel 4 and E4 series.

Episodes are available 48 hours before general release and include programmes such as Made in Chelsea, Peep Show, Fresh Meat and My Mad Fat Diary.

The upgrading of O2’s 2G and 3G networks, as well as the rollout of 4G, continued in the quarter as part of the company’s five-year, £3 billion plus network modernisation program.

O2’s 4G network, which launched in August 2013, now covers 73 per cent of the UK population outdoors (up 29 percentage points year on year, reaching 559 towns and cities. O2 didn’t reveal 4G customer numbers in its results.

In addition, O2’s free public WiFi network was accessed by over 15 million users accessing the company’s 11,000 hotspots. The operator’s customers automatically connect to O2 WiFi if the signal is stronger than their 3G or 4G service.

O2 UK CEO Ronan Dunne said: “These results show that we continue to compete fiercely, continue to differentiate, ands continue to deliver for our customers.

“Whatever happens with the market in terms of competitor announcements or consolidation, we will remain firmly focused on our customers and will remain impossible to ignore.