O2 adds one million contract customers, revenues up, churn down

O2 adds one million contract customers, revenues up, churn down


O2 UK added over one million contract customers during 2009, taking its total customer base to 21.3 million at the end of December.

The UK’s largest operator reported its results for Q4 and the full year today (26 February).

O2 added 338,455 customers during the fourth quarter, 235,486 of which were on contract.  The contract segment made up 44.9% of the network’s base at the end of December 2009, compared with 41.5% in 2008.

The operator said this was due to churn reduction and ‘increased commercial activity on a wide range of devices, with particular focus on smartphones’. Its simplicity tariffs and prepay to contract migrations also contributed to growth.

Churn decreased to a ‘record low’ of 1% in the fourth quarter, with total churn in 2009 remaining ‘stable’ at 2.6%.

Meanwhile, revenues grew by 3.5% in 2009, year on year in local currency, to £5.6bn. Operating income was £1.5bn in 2009 – a 2.3% growth on 2008, in local currency.

The operator said traffic in 2009, grew 15.6% year on year to 53,856 minutes, driven by O2’s contract base increase as well as ‘continued utilisation’ of voice bundles.

But ARPU showed a 4.4% year on year decline to £22, due to termination rate cuts and increased non-voice access, while data ARPU increased by 3.7% to £8.2.

CEO of Telefonica Europe, Matthew key, said: ‘In the United Kingdom, Telefonica O2 UK defied a shrinking market, reporting strong financial results and gaining share in 2009 through a consistent approach to our core mobile business while expanding into new areas.  This positive evolution was mainly due to our unwavering commitment to putting our customers at the heart of everything we do - reflected in our industry-leading rates of churn. Increased commercial activity on a wide range of devices, with a particular focus on smartphones, was also a significant driver of growth in the year.

He added: ‘In 2009 we sold our two millionth iPhone in the UK, which continues to sell extremely well along with our wide range of other smartphones. Data revenues increased 52% year-on-year in local currency, with the strong contribution from mobile internet user growth. Our total mobile customer base was up 5.1% to 21.3 million (excluding Tesco Mobile) at the end of December.  The contract segment continues to drive growth, with 1.1 million additional customers in 2009, and it now makes up nearly half of our total customer base.’

Written by Mobile Today
Mobile Today


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