Smartphones and mobile broadband drive O2’s third quarter

11 Nov 2010

Telefónica O2 Ireland added 5,400 new customers during the third quarter, according to its latest set of key performance indicators, which point to mobile broadband and smartphone devices as main growth drivers.

Blended ARPU for the first nine months of 2010 was €37.14 per month, down from €39.67 for the same period last year.

O2’s mobile broadband service continued to see sustained growth, with more than 160,000 customers currently signed up, it’s the highest ever level. A key initiative during Q3 was the launch of a new offer with HEAnet, whereby third-level students can avail of discounted mobile broadband from O2 for the academic year.

In the first nine months of 2010, more than 84pc of all texts sent by O2 prepay customers were free, while 61pc of all prepay domestic voice minutes used were free.

In total, 2.474 billion texts were sent by O2 customers – prepay and postpay – in the first nine months of 2010, up from 2.315 billion in the same period last year. Some 3.519 billion voice minutes were used, up from 3.494 billion in the same period last year.

Some 5,400 new mobile customers were added in Q3 to bring O2’s total mobile customer base to 1.716 million at the end of September 2010.

Service revenue for Q3 was €198m, up from €193m in Q2 and down from €213m for the same period last year.

Data revenue as a percentage of service revenue continues to grow, driven by the increase in non-SMS revenues which account for 12.4pc of overall service revenues in Q3, up from 10.4pc on the same period last year.

The growth is being driven largely by the increased adoption of O2 Mobile Broadband and smartphone devices. Monthly average blended ARPU for the first nine months of 2010 was €37.14, down from €39.67 for the same period last year.

Monthly average ARPU for prepay customers for the first nine months of 2010 was €24.32, down from €25.16 for the same period last year, while for postpay customers it was €55.33 down from €63.03.

Average monthly minutes of use in the quarter was 228, up from 226 for the same period last year.

Data services boost revenue

“We continue to see our customers using more data services, reflecting the growing importance of smartphones and mobile devices to access the internet on the move,” said Paul Whelan, chief financial officer, Telefónica O2 Ireland.

“The resulting growth in data revenue is also encouraging against the backdrop of the very difficult economic climate which, coupled with the better value for money products we are offering, continues to put downward pressures on ARPU.

“With competition in the telecoms sector in Ireland the most intense it has ever been, we continue to be successful in attracting new customers and retaining existing ones. Our customer loyalty initiatives such as O2 Treats and Priority Ticketing for The O2 have played an important part in this, with almost 250,000 customers signed up for Priority Ticketing, and 220,000 customers signed up for O2 Treats”.

In October, Telefónica announced that, after nine successful years in her role, Danuta Gray plans to step down as CEO of Telefonica O2 Ireland.

On 1 December 2010, Danuta will be succeeded by Stephen Shurrock, currently O2’s consumer sales director, O2 UK.

Gray will take up a new position of part-time non-executive chairman of Telefónica O2 Ireland, as well as undertaking an advisory role within Telefónica Europe.

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