O2 increases subscribers, but ARPU levels out

1 Mar 2007

Mobile operator O2 Ireland this morning said that its average revenues per user (ARPU) have levelled out against the backdrop of an extremely competitive market. Despite this, in the fourth quarter the company added 29,000 new subscribers to reach 1.63 million subscribers.

For the fourth quarter the company said that blended ARPU was flat at €45, and down slightly from €46 for the same time last year. Monthly ARPU for post-pay customers was €81, down from €83 in the third quarter and for prepay customers ARPU was flat at €30, and down slightly from €31 last year.

O2 added 17,000 new post-pay customers and 12,000 pre-pay customers during the fourth quarter.

Service revenues declined by 1.5pc year on year, which the company attributed to termination rate regulation, increased competition and ongoing promotion activities.

Data revenue as a percentage of overall service revenue was 22.1pc in Q4, up from 20.8pc last year.

During Q4 over 424 million text messages were sent, representing a 10.4pc increase on last year’s 384 million text messages in Q4.

Another important development in the fourth quarter was the signing of a deal between O2 Ireland and Tesco to create a mobile virtual network operator (MVNO) service called Tesco Mobile that will launch this summer.

Technology innovation was the order of the day with O2 becoming the first mobile operator in Europe to carry Napster Mobile, which has over two million songs available for download. The Irish division of O2 also launched a new device repair programme called O2’s Swap Out Service.

“The marketplace in Ireland continues to be extremely competitive,” acknowledged O2 Ireland chief financial officer Paul Whelan. “Against this backdrop, ARPU has levelled out, though significantly our customer base continues to grow, reaching its highest ever level of 1.63 million customers.

“In particular, growth in our postpay base was impressive, with 17,000 net new customers being added. In such a competitive market our emphasis continues to be on investing in our customers and in their loyalty by ensuring that we provide them with the services that best meet their needs.

“We achieve this by continuing to invest over €4 million each week in maintaining and upgrading our network,” Whelan said.

The company also revealed that its trial of broadcast mobile TV (DVB/H) trials will commence later this month with 350 people in the Greater Dublin area being able to access all the main Irish TV channels plus content from Sky.

By John Kennedy