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O2 sees Q3 Covid-influenced revenue decline, announces nationwide device donation drive

Jasper Hart
October 29, 2020

Revenue takes a hit due to Covid-induced roaming declines and ‘handset release phasing’

O2 continued to grow its customer base in the third quarter and reduce its churn, despite a Covid-influence revenue decline.

The total number of connections on O2’s network, including those who use it through MVNOs giffgaff, Tesco Mobile, Sky Mobile and Lycamobile, increased by 1.3 million year-on-year to 35.4 million, an increase of 3.8 per cent.

This increase means that O2 remains the UK’s largest mobile network carrier. Churn was at 0.9 per cent, down from 1.0 per cent the year before.

However, revenue stood at £1.445 billion, a 9.5 per cent year-on-year decline. O2 attributed the decline to reduced roaming revenues and “other Covid impacts, and handset release phasing”.

Additionally, OIBDA for the quarter fell 4.5 per cent annually to £467 million, while capital expenditure for the year so far stands at £540 million.

“As the UK’s number one Network, it’s our responsibility to be there for our customers, providing fantastic connectivity, the best value and the industry’s leading customer service,” said O2 CEO Mark Evans.

“This has especially been true during the pandemic when our customers have needed us more than ever. It is therefore pleasing to see us sustain market-leading loyalty and the highest net promoter score in the sector, as more and more customers choose O2.”

Device donation drive

Alongside its financial results, O2 announced a nationwide device and data donation drive in partnership with charity Hubbub.

The two companies are aiming to donate 10,000 devices and 12 months of free connectivity (in the form of unlimited calls, texts, and 6GB of monthly data) to vulnerable individuals in cities that are experiencing or are at risk of Tier 3 lockdown restrictions.

This is an extension of the pilot scheme O2 and Hubbub ran in the London borough of Southwark during the first national lockdown, which saw more than 500 devices distributed to residents. They are working in conjunction with local authorities to identify those most in need of mobile connectivity.

“Connectivity has been vital to keeping the country running during the pandemic, but if you’re unable to get online you’re likely to miss out on a lot of support,” said Evans. “We’ve already seen the positive impact Community Calling has had on vulnerable people in Southwark, so we’re pleased to announce this expansion and tackle digital exclusion elsewhere across the country. We’re determined to support the people who need it most.”

Hubbub director Gavin Ellis added: “We’re looking forward to working with O2 to expand Community Calling to get more people connected and prevent unnecessary electrical waste. We’re calling on individuals and businesses with spare smartphones to donate them to somebody who needs a device to stay connected at this difficult time.”

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