O2 recorded its best performance in four years in terms of adding contract customers despite posting a small revenue loss.
The operator grew its net postpay base by almost one million customers (983,000), with around a quarter signing up in Q4. It was the eighth successive quarter that O2 added over 200,000 net contract customers. O2 also announced that it had reached the milestone of one million customers paying for and using 4G, while its whole customer base was up 8% year-over-year. Total mobile customer base was up 3% year-over-year to 23.6 million.
Refresh tariffs, O2's proposition that allows customers to get a new phone when they choose, were seen as a key catalyst for its postpay success. 56% of new contract customers in Q4 chose O2 Refresh deals, increasing 3% quarter-on-quarter. Refresh customers now account for 1.1 million of O2's postpay base. Churn rates improved by 0.1% to 1.0%.
Overall revenue fell by 0.5% year-over-year in 2013, although Q4 shows a rise of 0.3% to £1,464m. Mobile service revenue decreased by 6.1% due to mobile termination rate cuts, roaming regulation and the O2 Refresh model. The operator also posted a 7% year-over-year growth in OIBDA to £372m, with an 11.8% year-over-year rise for Q4. OIBDA margin was 25.4% in Q4, up 2.6 percentage points year-over-year.
O2's 4G network now covers 32% of the population. 19 million people in 16 cities and 160 towns now have access to its ultrafast network, and plans to cover 98% of the country by 2017 are on track. Earlier this month O2 made 4G available to existing customers at no extra cost.
CEO Ronan Dunne (pictured) said: ‘Putting customers first has always been at the heart of everything we do. We continue to offer our customers unique services and they are rewarding us with their loyalty and satisfaction. We’re also building a faster, smarter and stronger network which is bringing tangible benefits to our customers every day, whether that’s better call quality, faster download speeds or greater network coverage. In 2014, we’ll be even more relentless in giving customers more reasons to join and stay with O2.’