O2 profits rise
and prices fall

17 Nov 2003

Profits at O2 in Ireland were up 29pc according to the company’s latest H1 figures, which indicated that EBITDA rose from €114m last year to €147m this year.

Service revenues at O2 grew to €352m from €321m last year. Total revenue in the half year was €371m, a 21pc increase.

The company said that its customer base increased only marginally during the half year, to reach 1.2m people. The company’s profit and revenue rise was attributable to customers spending more time on their phones. Average minutes of usage increased to 192, up from 188 minutes per month last year. In comparison with minutes of usage with O2’s UK customers, typical usage stood at 114 and in Germany it was 113 minutes per month.

Data as a percentage of service revenues grew to 18.4pc in the half year, up from 14.1pc last year. The number of text messages sent during the half year increased to 272 million from 224 million the year earlier.

Blended average revenue per user (ARPU) increased to €551 over €542 last year, driven by more post pay customers joining O2. Pre-pay ARPU grew to €349 and post-pay ARPU grew to €1,037.

During the half year, O2 Ireland gained 2,000 new customers. Postpay churn was stable, the company said, and there was a reduction in the acquisition costs of postpay customers.

O2 Ireland’s chief executive Danuta Gray commented: “In a fiercely competitive market, we have once again managed to increase our customer numbers, improve our operational performance and maintain our position in delivering superior services to our customers.”

She added: “We are extremely pleased with today’s results which reflect our commitment to maintaining a high quality network and introducing services to our customers that provide real benefits to them. We have again demonstrated increased usage among our customers of their mobile phones, reinforcing the fact that high ARPU in this market is driven by high usage and not high call charges.”

In conjunction with the results, Gray revealed significant price reductions for pre-pay customers and said that further pricing reductions and roaming initiatives will be announced. Effective immediately, weekend calls to other mobile networks from O2 will be reduced by 37pc and that weekend calls to O2 mobiles and landlines will be reduced by 8pc.

The company has also immediately cut the cost of its text messages to 7.5c as well as extending its off-peak periods for night and day calls to 16 hours each day. The company also revealed a 21pc in the cost of off-peak calls to O2 mobiles and landlines as well as a 13pc cut in the cost of peak time calls to O2 mobiles and landlines.

By John Kennedy