5/13/2010 10:46:00 AM
O2 adds contract customers in Q1
O2's customer numbers rose by 4.6% to 21.4 million during Q1 2010, driven by a 12% increase in its contract base. The operator reported results for the quarter ended 31 March today (12 May).
At the end of March this year, 46% of O2's customer base was contract, with improvement of the quality fuelled by smartphone take up.
The company saw 195,000 contract net additions in the first quarter, with a 'best in class' churn of 1.1%. Total churn decreased 0.2 percentage points over the previous year to 2.6%.
Meanwhile, traffic in the first quarter of 2010 increased 10.6% year-on-year to 14,155 million minutes, reflecting a significant uptake from contract customers and improved trends in roaming traffic, the network said.
O2 UK's total ARPU in the first quarter of 2010 showed a better performance quarter-on-quarter, recording a 3.1% decline year-on-year in local currency to 24 euros year-on-year in the fourth quarter of 2009.
Data ARPU showed year-on-year increase in local currency of 7.2% to 9.6 euros, an improvement over the 6.2% year-on-year growth reported in the fourth quarter of 2009.
Revenue grew 2.1% year-on-year in local currency to reach 1,634m euros. Mobile service revenues increased 9% year on year to 1.503m euros.
Total data revenues reached 614m euros, amounting to 40.9% of mobile service revenues in the first quarter of 2010.
Matthew Key, chairman and chief executive of Telefnica Europe (pictured), said: 'Telefnica Europe once again delivered strong revenue growth and increased profitability despite an uncertain economic climate in highly competitive markets and the negative impact of mobile termination rates.
'We maintained our excellent momentum across key growth drivers, with increased smartphone penetration and mobile internet usage. We continue to outperform our competitors in key markets most significantly in Germany, where O2 notably gained 357,000 net additions in the first quarter, while in the UK our financial performance is clearly ahead of other operators.
'Our customer base continues to grow faster than the competition, driven by a strong performance in the postpaid segment led by Telefnica O2 Germany's outperformance and Telefnica O2 UKs record-breaking levels of churn.
'In an increasingly competitive environment in the United Kingdom, Telefonica O2 UK continues to deliver market leading financial results, with underlying growth in mobile service revenues, excluding mobile termination rate cuts, accelerating to 9.4% year on year and impressive OIBDA growth of 7.3%, combined with further margin improvement.
'Our core belief in putting the customer first is paying dividends with a best in class churn of 1.1% in the contract segment, demonstrating our clear ability to retain high value customers. Our customer base quality continues to improve, with nearly half of our customers (46%) now in the contract segment. O2's total mobile base in the UK (excluding Tesco Mobile) increased 4.6% year-on-year to reach 21.4 million customers.
'As the Home of the Smartphone, we are ahead of the learning curve in understanding customer behaviour which allows to offer great user experience. Not only are independent tests increasingly naming O2 as the superior mobile data operator, but our market leading churn is proof that customers continue to stay with us regardless of any smartphone exclusivity. Furthermore, our focus on capturing the mobile internet opportunity to drive further revenue growth is already bearing fruit, as showed by a 44% increase in non-SMS data revenues.'