iPhone and mobile broadband drive revenues at Telefónica O2

30 Jul 2009

Telefónica O2 said today that service revenues rose by €1m year-on-year to €211m during the second quarter. The company said major gains in post-pay customers, the success of the iPhone and demand for mobile broadband were key factors.

The company said that it added 6,093 customers year-on-year, bringing its total customer base to 1.71 million, up 1.7pc.

Data revenue as a percentage of overall service revenue grew to account for 10.7pc of all service revenues.

A key driver for this growth was mobile broadband, with customer numbers now standing at 112,000. On Tuesday of this week, O2 launched a new ‘try before you buy’ initiative for potential mobile broadband customers, enabling them to borrow a broadband modem to trial for three days, without the need to sign up to a contract. If customers like the service, they can sign up after the three-day trial period. If they don’t, they can simply return the modem to O2.

The post-pay/contract market continued to deliver growth for O2 with 11,444 net new customers in Q2 2009, achieving a total post-pay customer base for the company of 662,604.

For the first time, this makes O2 the No 1 operator in the post-pay mobile market in Ireland.

The pre-pay base declined by 5,351 customers in the same period, a significant improvement on Q1 which saw the pre-pay base decline by 25,202.

Monthly average blended ARPU for the quarter was €39.76, up 1.1pc from €39.34 in Q1 but down 7.9pc from €43.19 for the same period last year.

“In what continues to be an extremely challenging market, O2 made solid progress in the second quarter of 2009, increasing customer numbers particularly in post-pay, which includes mobile broadband,” said Paul Whelan, chief financial officer, Telefónica O2 Ireland.

“At the end of June, the total post-pay customer base reached 662,604, which saw O2 becoming the No 1 operator in the post-pay mobile market in Ireland for the first time. We have achieved this by continuing to meet the changing needs of our customers and their requirements for greater flexibility and control, through value for money tariffs and our innovative products and services.

“iPhone has proved to be hugely popular with our customers and, in line with our strategy to bring our customers the very best innovations in mobile communications, we recently announced that O2 will be the exclusive carrier of the much anticipated Palm Pre when it launches later this year. Mobile broadband also continues to drive growth, with almost 112,000 customers signed up to date,” Whelan said.

“Looking ahead, we expect tough trading conditions for the remainder of the year. While service revenues increased marginally in the second quarter of 2009, we will continue to maintain our emphasis on cost management and improving cash-flow performance within our business,” Whelan added.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years