5/16/2007 10:35:00 AM
O2 adds 80,000 contracts in Q1
O2 UK's gross additions in the three months to the end of March 2007 were around 10% lower than the same period in 2006, which the company said reflected 'the increasingly mature nature of the UK market but also the focus on customer retention'.
A total of 118,000 net new customers were added in the quarter, taking the base to 17.8 million, 8.6% higher than at the same time last year (excluding the Tesco Mobile customer base, which recently reported 1.4 million customers). O2 UK's own channels accounted for around 60% of gross connections in the quarter.
A total of 80,000 net new contract customers were added in the quarter and at the end of the period contract customers made up 35.5% of the total base, compared to 34.8% in the same period last year. Quarterly monthly contract ARPU of €63.2 was flat compared to the first quarter last year.
A total of 38,000 net pre-pay customers were added in the quarter.
Blended average monthly churn in the quarter was flat year-on-year at 2.6%.
UK revenues in the 3 months to 31 March 2007 were €1,759 million, a like-for-like increase of 10.2%.
The change in year end from March to December has impacted the year on year growth, with the first quarter of 2006 representing the last quarter of O2's old reporting year (which ended in March). This has also led to different commercial activity in the first quarter of 2007 compared to 2006, and consequently higher commercial costs.
Quarterly monthly pre-pay ARPU of €17.0 was 0.9% lower than the first quarter of last year. O2 UK's blended monthly ARPU of €33.3 was 0.8% higher than the first quarter of last year, reflecting more contract customers in the base.
O2 UK's broadband unit Be had rolled out to over 632 exchanges by the end of the quarter, giving its broadband network a population coverage of around 40%, with 24,000 customers.
Peter Erskine, chairman and CEO of Telefónica O2 Europe, said: 'In the UK total revenue grew by 10% in the quarter and we added 118,000 net new customers, with almost 70% on contract, driven by our Fair Deal campaign treating new and existing customers the same, to finish the quarter with a total customer base of 17.8 million. Upgrades in the quarter increased by 22% compared to last year and monthly minutes of use were up 11%.
'It was very pleasing that our UK business was independently judged as being the most trusted of all mobile networks in the UK and one of the best big companies to work for, demonstrating that our efforts to achieve happier, more loyal customers is also being reflected internally.'