Contactless payments will take off as NFC-enabled handsets reach the market in Q3 2011, O2 CEO Ronan Dunne told Mobile last week.
He said: ‘It may be a slow burn start, but the big retailers are gearing up for it. One of the reasons for introducing the O2 Money card was to get people used to the idea. If you get used to tapping your card for a newspaper every morning, tapping your phone won’t be such a big transition.’
Dunne said he was pleased with O2’s progress in upgrading its network in 2010, citing Ofcom’s permission to refarm part of its 900MHz spectrum for 3G as a particular boost.
He also singled out the tie up in January with 2E2, which allows O2 to offer a full unified comms suite of solutions. ‘I definitely think it’s a market where mobile operators can differentiate themselves from fixed line providers,’ he said.
Commenting on O2 UK’s Q4 2010 and full 2010 results, Dunne said: ‘What’s been most pleasing has been our consistency over the last 12 months. We’ve consistently grown revenue and profit.’
Mobile service revenue was up 7.9% in the last quarter of 2010 to £1.43bn, while the figure for 2010 overall was £5.58bn, up 5.6% year on year. Operating income before depreciation and amortisation reached £1.55bn in 2010, up 9% on 2009. O2’s total customer base reached 22.2 million, a rise of 4.3% overall. Contract customers reached 10.4 million – up 9.8% year on year, representing 47% of the base. Prepay customers were slightly down (0.2%) year on year, but rose by nearly 53,000 in Q4.
‘Prepay growth was very good. We think we are behaving differently to everyone else here,’ said Dunne. ‘But we have no target for the mix in our base. I’m very flexible; as long as we are giving customers value, it is not a big deal for us what the mix is. I think that if you give customers the freedom to leave, you give them the confidence to stay.
‘We were the first to introduce Sim-only deals, so we don’t try to lock customers in. If we give them the right value and experience, then they will choose to stay.’