Original URL: http://www.theregister.co.uk/2006/01/23/o2_kpi/

O2 chalks up 27m mobile punters

Final numbers before Telefonica buy-out

By Tim Richardson

Posted in Financial News, 23rd January 2006 11:06 GMT

O2 - the UK cellco that's about to be swallowed by Spain's Telefonica for £18bn - signed up 1.75m new punters in the last three months taking the total number of customers to almost 27.5m.

In the UK, the firm added 895,000 punters and was "particularly pleased" with the addition of 274,000 contract customers. In Germany O2 chalked up an extra 823,000 new users.

Publishing its final set key performance indicators (KPIs) before being gobbled by Telefonica, O2 noted that net service revenue grew by 12 per cent year-on-year in the UK while Germany saw growth of 17 per cent during Q3.

At the same time, though, the average amount each of its punters spent in the UK (ARPU) slipped slightly to £272 compared to the same period last year. In Germany, Q3 ARPU fell from €370 to €338 due to an "increasingly competitive market".

Said chief exec Peter Erskine in a statement: "The strong momentum in all O2's businesses was sustained through the third quarter. Across the group we added 1.75 million customers, taking the total base to 27.4 million, 18 per cent higher than last year.

"As we approach completion of the acquisition of O2 by Telefonica, all our businesses are performing well, and we look forward to maintaining momentum as part of Telefonica."

Earlier this month the European Commission cleared Telefonica's takeover of O2 despite concerns that the buy-out might jeopardise competition for international roaming charges.

That's because both Telefonica and O2 belong to different industry groups that co-operate on roaming enabling punters to use their mobiles overseas as if they were at home.

Along with incumbents France Telecom, Telecom Italia and Deutsche Telekom, Telefonica is part of the so-called FreeMove alliance.

O2, on the other hand, is part of the Starmap alliance made up of smaller telcos.

This, said the Commission, "gave rise to competition concerns on the market for international roaming services" because O2 would most likely join the big boys at FreeMove and "O2 would in all probability be less ready to exchange international roaming traffic with non-FreeMove members".

To resolve this potential problem, Telefonica agreed to leave FreeMove.

In October last year O2 agreed to be bought by Telefonica for £18bn as the Spanish telco looks to expand its operations into UK and Germany.

Mobile outfit O2 - which split from BT in 2001 - will retain its bubbly brand and keep its HQ in the UK. ®