O2 Ireland’s ARPU falls in Q1

14 May 2008

Mobile operator O2 said this morning that monthly blended average revenue per user (ARPU) – combining voice and data revenue – fell from €45.2 in the fourth quarter to €44.2 in the first quarter of 2008.

The company said that service revenue in the first three months of this year fell by 0.7pc to €222m.

This is despite the company’s customer base growing by 1.8pc to 1.663 million users – the highest level it achieved so far. This equates to 16,805 net new customers added during the quarter.

During Q1, some 439 million text messages were sent – up 10pc on Q4.

Average monthly ARPU for post-pay customers was €75.5, down from €78.8 in Q4, while average ARPU for prepay customers was €26.7, down from €29 in Q4.

O2’s 3G broadband services, the company said, continues to exceed expectations with over 50,000 subscribers to date. Rumours are still circulating that O2 is the leading bidder likely to buy fixed line operator Smart Telecom.

Smart is understood to be seeking offers up to €100m and other companies including Carphone Warehouse, BT and 3 Ireland have been tipped as rival bidders to O2.

Data revenue as a percentage of overall services revenues at O2 Ireland amounted to 26.8pc, up from 26pc a year ago.

Financial officer Paul Whelan said that the decline in ARPU was being driven as a result of better value for money for the company’s customers.

“With almost 17,000 net new customers added, however, O2 achieved its highest ever subscriber base of 1.663 million customers in the quarter,” Whelan added.

“Data revenue also continues to grow year-on-year, and is indicative of the take-up of new data services such as O2 Broadband, now with over 50,000 subscribers.”

During the quarter, O2 became the main distributor in Ireland for Apple’s iPhone, alongside Carphone Warehouse.

A spokesman said the company would not be revealing how many of the devices have been sold locally to date, except that sales had been “going well.”

A week ago, it emerged that the company dropped the price of the 8GB version of the iPhone by €100 to €299 as part of a promotional plan that will run until 25 May.

Asked if there was any information regarding the potential arrival of a 3G version of the iPhone, the spokesman said that he had no comment to make.

By John Kennedy