O2 third quarter results
Telefonica SA
13 November 2006
Press Release
PR0627
O2 ANNOUNCES THIRD QUARTER RESULTS
Released: 13 November 2006
Key performance indicators at 30 September 2006:
Mobile service revenue in the third quarter (at constant currency):
• O2 UK net service revenue grew by 14.9% year-on-year;
• O2 Germany service revenue grew by 6.1% year-on-year;
• O2 Ireland service revenue fell 1.7% year-on-year;
• O2 Czech Republic service revenue grew by 6.5% year-on-year.
Mobile average revenue per user (12 month rolling ARPU):
• O2 UK blended ARPU £272 (Q2 2006: £271; Q3 2005: £265)
• O2 Germany blended ARPU €299 (Q2 2006: €308; Q3 2005: €343)
• O2 Ireland blended ARPU €545 (Q2 2006: €551; Q3 2005: €551)
• O2 Czech Republic ARPU CZK6,089 (Q2 2006: CZK6,083; Q3 2005: CZK6,143)
Mobile data in the third quarter
• Group SMS volumes grew by 26% year on year to 6.49 billion messages
Outlook
• 11 months to 31 December 2006
• UK service revenue growth guidance increased, margin reduced
• Germany service revenue growth reduced, margin unchanged from previous
guidance
• 12 months to 31 December 2006
• Czech Republic OIBDA guidance increased, revenue unchanged from
previous guidance
Peter Erskine, Chairman & Chief Executive of O2, commented:
'O2 has continued to thrive as part of the Telefonica group and in the third
quarter we have maintained our momentum in highly competitive markets, adding
812,000 mobile customers, taking the total mobile customer base to 34.4 million,
14% higher than last year.
In the UK we added 524,000 net new customers, driven by our customer focused
propositions and ongoing strategy of treating both new and existing customers
equally. Contract churn was again reduced, for the fifth quarter in a row, while
gross connections grew 15% year on year, helping to extend our strong
performance from the first half into the third quarter. This faster than
expected growth has allowed us to again raise service revenue guidance, and we
now expect 14% to 15% growth year on year for the 11 months to 31 December 2006.
In Germany we added 294,000 net new customers in the quarter taking the total
base to 10.629 million, representing 19% year on year growth. The market
continues to be highly competitive and this, coupled with termination rate cuts,
contributed to the decline in 12-month rolling ARPU, although monthly ARPU
increased quarter on quarter. We continue to watch the future direction of this
trend. Our Tchibo joint-venture continued to perform well adding 50,000
customers. We have adjusted full year guidance for Germany to reflect the
slightly lower than expected service revenue growth we have seen in the first
eight months of the year and the planned increase in our commercial activity in
the fourth quarter.
In the Czech Republic O2 added 55,000 net new mobile customers on contract,
raising the percentage of contract customers in the base to 37.4%, compared to
only 30.9% at the end of September 2005, demonstrating the ongoing success of
the pre-pay to contract migration strategy. In our fixed line business, the
total number of ADSL lines stood at 427,000 at the end of September, compared to
221,000 at the same time last year.
In a competitive market O2 Ireland traded well, adding 16,000 net new contract
customers and ending the quarter with a total customer base of 1.603 million, 2%
higher than at the same time last year.
Airwave continues to make good progress in winning new contracts and rolling out
the service to new customers. During the quarter the Scottish Ambulance Service
signed a 10 year contract worth almost £50 million, while the rollout of Airwave
to Ambulance Trusts in England is progressing well with 3 Ambulance Trusts now
at 'Ready for Service', the first key milestone in the Ambulance Programme.'
FINANCIAL DATA
The results of O2 Group comprise the results of O2 UK, O2 Germany, O2 Ireland
and O2 Airwave for the 8 month period ended 30 September 2006. It also includes
the results of be* from 1 July 2006 and Decision Focus from 1 August 2006.
O2 Group Consolidated Income Statement
Unaudited figures
3 months ended Period ended
30 September 2006 30 September 2006
€m €m
Revenues 3,003.5 7,635.0
Internal expenditure capitalized in
fixed assets (1) 49.2 132.7
Operating expenses (2,238.2) (5,666.6)
Other net operating income (expense) (22.5) (46.3)
Gain (loss) on sale of fixed assets (5.5) (10.2)
Impairment of goodwill and other assets 0.0 0.0
Operating income before D&A (OIBDA) 786.4 2,044.6
(1) Including work in process
O2 Group capital expenditure for the 8 month period ended 30 September 2006
totalled €1,483.1 million.
The results of O2 Europe for the period ended 30 September 2006 comprise the
results of the O2 Group for the 8 month period ended 30 September 2006 and the
results of Telefonica O2 Czech Republic and Telefonica Deutschland for the 9
month period ended September 2006. It also includes the results of be* from 1
July 2006 and Decision Focus from 1 August 2006.
Telefonica O2 Europe Consolidated Income Statement
Unaudited figures
3 months ended Period ended
30 September 2006 30 September 2006
€m €m
Revenues 3,606.71 9,434.3
Internal expenditure capitalized in
fixed assets (1) 64.2 161.9
Operating expenses (2,603.0) (6,733.9)
Other net operating income (expense) (23.16) (53.8)
Gain (loss) on sale of fixed assets (3.9) (8.8)
Impairment of goodwill and other assets (0.1) (1.5)
Operating income before D&A (OIBDA) 1,040.7 2,798.2
(1) Including work in process
Telefonica O2 Europe capital expenditure for the period ended 30 September 2006
amounted to €1,675.2 million.
STRATEGIC AND OPERATIONAL HIGHLIGHTS
O2 brand launched in the Czech Republic
On 1 September the Czech Republic business changed its brand to O2, endorsed by
the logo of parent company Telefonica, for all of its fixed and mobile services,
replacing the existing Cesky Telecom and Eurotel brands. This ongoing
re-branding programme is the largest of its kind in the Czech Republic. At the
same time, a range of new products was launched under the O2 brand, including O2
TV, an IPTV service based on the Imagenio platform developed by Telefonica. With
the unified brand of O2 the Czech business is well positioned to offer customers
solutions for all of their telecommunications needs.
Mobile licence won in Slovakia
On 7 August Telefonica O2 Slovakia, a wholly owned subsidiary of Telefonica O2
Czech Republic, was awarded a 20 year licence to operate GSM and UMTS networks
in Slovakia. This new operation is an organic expansion of the existing business
in the Czech Republic and will take advantage of synergies in areas such as
network and back office functions. Juraj Sedivy, former CFO of the Czech
Republic business, has been appointed as CEO. The Slovak business will use the
O2 brand and commercial launch is expected in the first quarter of 2007.
DSL launched in Germany
After the end of the quarter, on 27 October, O2 Germany launched its DSL offer,
backed by a wide-ranging advertising campaign. O2 is the only provider of
integrated communication services in Germany to offer mobile, fixed voice and
fixed internet services. O2 DSL customers get one monthly bill, backed by a
single customer service number and competitive monthly charges. Customers can
choose from three different DSL packages and will receive a discount if they are
also a mobile contract customer of O2.
'High roamer' tariff launched as part of My Europe
After the end of the quarter O2 UK, in conjunction with movistar in Spain,
launched a new 'high roamer' service aimed at frequent travellers, which removes
charges when receiving calls abroad. This is the second initiative to be
launched under 'My Europe', a set of low cost roaming tariffs from O2 and
movistar for European customers. The tariff will initially be available to O2 UK
customers travelling to Spain and in the first half of next year the service
will be expanded to more than 35 destinations across Europe. For movistar
customers, the tariff is available in 33 destinations across Europe. The 'high
roamer' service has also been introduced by O2 Telefonica Czech Republic and
complements the first offering under My Europe, which was launched in the Summer
and offers holidaymakers reduced flat-rate voice roaming rates throughout the EU
across all networks.
THIRD QUARTER OPERATING REVIEW
O2 UK
Third quarter net service revenue grew by 14.9% year on year and for the eight
months to September reached a total of £2,785 million, an increase of 15.0%
compared to the same period last year, driven by continued strong customer and
ARPU growth.
OIBDA margin for the eight months to September 2006 was 27.6%, reflecting the
current high level of customer growth. O2 UK will continue to prioritise growth,
where higher value customers can be acquired, for the rest of this year. OIBDA
for the eight months to September 2006 was £837 million.
The quarter again saw tough competition in the market, but the business
continued to perform well and achieved 15% growth in total gross additions year
on year. A total of 524,000 net new customers were added in the quarter, taking
the base to 17.338 million, maintaining year on year growth at 15%. This figure
excludes the Tesco Mobile customer base.
A total of 208,000 net new contract customers were added in the quarter, driven
by higher gross additions as well as lower churn. At the end of the period
contract customers made up 35.1% of the total base, compared to 34.7% in the
same period last year. 12 month rolling contract ARPU of £515 was down £2
quarter on quarter, but £2 ahead of the third quarter last year. 12-month
rolling contract churn was 24%, compared to 30% for the same period last year,
the fifth consecutive quarter of decline, reflecting the ongoing strategy of
rewarding customer loyalty.
A total of 316,000 net new pre-pay customers were added in the quarter, again
driven by higher gross additions as well as lower churn. 12 month rolling
pre-pay ARPU of £142 was £7 higher than the third quarter last year and £2
higher than the previous quarter.
O2 UK's blended 12 month rolling ARPU of £272 was £7 higher than the third
quarter last year, and £1 higher than the previous quarter, reflecting the
continued growth in data ARPU coupled with broadly flat voice ARPU.
O2 UK's own channels accounted for a growing percentage of total gross
connections in the quarter, reaching 61%. O2 UK also completed the acquisition
of The Link's 293 stores during the quarter which, after disposals and the
re-branding of selected locations, will grow O2's retail channel to around 400
stores. Customer acquisition costs (SAC) were stable at a blended level.
Quarterly monthly minutes of use were up 11% year on year to 175 minutes a
month, driven by propositions such as 50% extra minutes on 18 month contacts and
O2 Long Weekends.
12 month rolling data ARPU of £83 was £9 higher than the same period last year
and £2 higher than the previous quarter.
Capex in the eight months to September (excluding capex related to the
acquisition of be*and The Link) was £350 million, with continued expenditure on
rolling out coverage of the 3G network as well as investment in the existing 2G
network to ensure a high level of service.
O2 UK launched a number of new products and services during the quarter, aimed
at acquisition and retention of customers and revenue growth. These included:
• 'My Europe' roaming tariff, offering holidaymakers a reduced flat-rate
voice roaming rates across the European Union. Using the free opt-in
service, O2 customers are charged a flat rate of 35 pence per minute to make
or receive a call within the EU, regardless of the mobile network used, at
any time.
• The 'Long Weekends' promotion, offering free on net calls from Saturday to
Monday for new and existing O2 Pay and Go customers and free calls to any
network in the UK for new Pay Monthly and upgrading customers.
• 'Be Heard' campaign, promoting the 24/7 availability of UK based business
advisors for Business customers, as well as a new Best for Business tariff
'Unlimited Off-Peak', offering free calls to all UK mobiles and fixed lines
during evenings or weekends .
• Two new own brand devices, ICE and Jet. Jet is a tri-band, low-cost
handset with a simplified user interface, offering 540 hours of standby time
and 9.9 hours of talk time, beating its nearest competitor by over 67%.
O2 Germany
Service revenue grew by 6.1% in the third quarter, and for the eight months to
September reached a total of €2,033 million, an increase of 8.1% compared to the
same period last year, driven by the continued growth of the customer base,
which partly offset ARPU weakness in the German market. Third quarter service
revenue was reduced by almost 4% due to the termination rate cut in December
2005.
OIBDA margin for the eight months to September was 24.2%, higher than expected
mainly due to the slower rate of post-pay gross additions. OIBDA for the eight
months to September 2006 was €531 million.
In this competitive environment, O2 Germany continued to trade well. A total of
294,000 net new customers were added in the quarter, taking the base to 10.629
million, 19% higher than at the same time last year. Over the last 12 months
there has been a rapid growth in the pre-pay customer base, resulting in pre-pay
customers making up over 50% of the total base for the first time. The Tchibo
Mobile customer base grew to 772,000 by the end of the quarter.
O2 Germany added a total of 96,000 net new contract customers in the quarter. 12
month rolling contract ARPU of €481 was €7 lower than the previous quarter, and
€35 lower than the same quarter last year. This reflected the impact of the
approximately 17% termination rate cuts in December 2004 and 2005, as well as
increasing competition in the German market and the introduction of new customer
offers.
A total of 198,000 net new pre-pay customers were added in the quarter. 12 month
rolling pre-pay ARPU of €111 was €6 lower than the previous quarter and €22
lower than the third quarter last year, reflecting the impact of the termination
rate cuts, increasing competition, the growth in multiple SIM ownership and the
consequent lower minutes of use.
Blended 12 month rolling ARPU is expected to remain the highest in the German
market at €299, down from €308 in the previous quarter and €343 in the same
quarter last year. This trend reflects the ongoing impact of the termination
rate cuts, the higher proportion of pre-pay customers in the total base, and the
increasingly competitive market environment. Termination rate cuts reduced 12
month rolling ARPU in the quarter by approximately €13. However, average monthly
ARPU in the third quarter rose €1 quarter on quarter to €25. Customer
acquisition costs (SAC) were stable at a blended level, but fell by around 20%
year on year.
Quarterly monthly minutes of use grew by 5% year on year, to 124 minutes, driven
by new propositions such as Genion flat rate. O2 Germany now has a total of 3.8
million Genion customers (72% of the post-pay base), with 51% of all new
post-pay customers opting for Genion.
12 month rolling data ARPU was €70, €1 less than the previous quarter and €9
lower than the same period last year due to the higher number of lower spending
pre-pay users in the base. Non-SMS data users grew 23% compared to the same
period last year.
Capex in the eight months to September was €745 million, with continued
expenditure on both the 3G and 2G networks.
O2 Germany launched a number of new products and services during the quarter,
including:
• 'My Europe' roaming tariff, offering holidaymakers a reduced flat-rate
voice roaming rates across the European Union until the end of the year.
Using the free opt-in service, O2 customers are charged a flat rate of 59
cents per minute to make or receive a call within the EU, regardless of the
mobile network used, at any time.
• O2 Loop Alltime. From 1 August until 27 November the cent per minute rate
has been reduced from 39 cents to 25 cents. Customers who top up €30 a month
can enjoy a rate of 15 cents instead of the previous 19 cents per minute for
all calls to fixed lines, mobiles and voicemail, as well as SMS at 12 cents
per message.
• O2 Communication Centre. The Communication Centre enables customers to
save data such as phone numbers, notes and calendar items to a secure area
on the O2 Germany website. If the customer changes handset or it is lost or
stolen, the data can be easily downloaded and restored. E-mail can also be
accessed via WAP Push or MMS.
• O2 ICE - own branded 3G handset featuring MP3 player, 1.3 megapixel camera
and one button access to the O2 Music Shop. A 512 MB Micro SD card is also
included, which can store around 500 songs. The O2 ICE costs €9.99 on a 24
month Genion contract with Genion flatrate.
• 'Bonus World', a new bonus program for O2 Genion or Active customers
running from 1 September until 27 November. By participating in surveys and
through using their phone customers can earn bonus points that can be traded
in for free calls, free SMS and other special offers.
O2 Ireland
Service revenue fell by 1.7% in the third quarter due to termination rate
regulation, increasing competition and the introduction of new customer offers.
The termination rate cut of RPI minus 11% in January impacted third quarter
service revenue growth by approximately 2%. For the eight months to September
service revenue reached a total of €601 million, an increase of 2.0% compared to
the same period last year, driven by a higher customer base.
In a competitive market O2 Ireland traded well, with gross connections at a
similar level to the previous quarter and net contract additions at a higher
level than in the third quarter last year. 4,000 net new customers were added in
total during the quarter, taking the total base to 1.603 million customers, 2.1%
higher than at the same time last year.
O2 Ireland added a total of 16,000 net new contract customers in the quarter. 12
month rolling ARPU of €1,040 was €35 lower than the third quarter last year and
€23 lower than the previous quarter, reflecting the impact of the termination
rate regulation.
Pre-pay 12 month rolling ARPU was €356, down €3 on the same period a year ago
and €4 compared to the previous quarter.
Blended ARPU of €545 was reduced by approximately €10 due to the termination
rate cuts, and was €6 lower than the same quarter last year and down €6 quarter
on quarter.
Quarterly monthly minutes of use increased by 9% year on year, mainly due to the
ongoing success of usage stimulation promotions such as 1 cent weekends on
pre-pay.
12 month rolling data ARPU was €116, €3 higher than the third quarter last year
and €1 lower than the previous quarter. Non-SMS data users grew by 45% year on
year.
In addition O2 Ireland launched a number of pricing initiatives and services
during the quarter. These included:
• 'Free Fiver Fridays' - a 3 month promotion launched on June 1, giving
pre-pay customers 25% extra free when they topped up €20 on a Friday using
an AIB or Bank of Ireland ATM facility, by text, or online.
• Double minutes for 6 months on all Active Life plans for new customers and
upgrades.
• Trial of a new device repair programme - Swap Out Service (SOS) - in six
O2 stores. Customers are given an immediate replacement handset if they have
a faulty device which is within its warranty period.
O2 Ireland also continued to promote the following offers:
• 1 cent calls and texts at weekends for Speakeasy customers was extended
until 25 February 2007.
• 20% extra inclusive calls & texts every month for life on all online
postpay tariffs - Online Active life, Online Easy life and Online Text life.
• 'My Europe' roaming tariff, offering holidaymakers a reduced flat-rate
voice roaming rates across the European Union. Using the free opt-in
service, O2 customers are charged a flat rate of 59 cents per minute to make
or receive a call within the EU, regardless of the mobile network used, at
any time.
Telefonica O2 Czech Republic1
Mobile service revenue grew by 6.5% in the quarter, driven by growth in the
customer base, up 6.0% year on year to 4.760 million, partially offset by
declines in ARPU.
A total of 55,000 net new contract customers were added in the quarter, bringing
the contract customer base to 1.782 million, an increase of 28.4% year on year.
Contract customers accounted for 37.4% of the total customer base at the end of
the third quarter, compared to only 30.9% at the end of September 2005.
This growth was achieved through acquisition of new customers as well as
marketing campaigns focused on pre-pay to contract migration, which also
accounted for the decline in the pre-pay base compared to the same period last
year and the previous quarter.
12 month rolling contract ARPU of CZK12,130 was CZK2,630 lower than the same
period last year, and CZK420 lower than the previous quarter, mainly due to the
effect of the pre-pay to contract migration strategy.
The pre-pay base declined by 65,000 in the quarter as a result of customers
using the analogue NMT network, who were disconnected at the end of June due to
closure of the network, not migrating to digital GSM services, as well as
customers migrating from pre-pay to contract tariffs. 12 month rolling pre-pay
ARPU of CZK2,854 was CZK129 lower than the third quarter last year and CZK21
lower than the previous quarter.
12 month blended ARPU was CZK6,089 in the third quarter, CZK54 lower than the
same period last year but CZK6 higher than the previous quarter.
12 month rolling data ARPU was CZK1,281, an increase of CZK93 compared to the
third quarter of last year and CZK13 higher quarter on quarter.
Quarterly monthly minutes of use remained at 102 minutes, up 9% compared to the
same period last year, mainly due to the increase in the contract customer base,
driven by migrations from prepay, and traffic stimulation promotions
In fixed line, total business revenues in the nine months to September fell by
4.8% year on year to CZK22.5 billion, as a result of the continued decline in
revenues from traditional voice services, which was not fully offset by the
increase in broadband revenues. Revenues from broadband services amounted to
CZK2.0 billion, up 48.8% year on year.
A total of 41,000 net ADSL connections were added in the third quarter, driven
by marketing campaigns promoting increased broadband speeds. The total number of
ADSL lines stood at 427,000 at the end of the quarter, compared to 221,000 at
the end of September 2005.
--------------------------------------------------------------------------------
1 After the merger of Cesky Telecom and Eurotel on 1 July 2006, all
inter-company charges between fixed (CESKY TELECOM) and mobile (Eurotel)
segments became intra-company. Therefore, the financial results of the fixed and
mobile segments for the nine months to 30 September 2006 are disclosed excluding
inter-segment revenues and costs. In addition, financials for the nine months
ended 30 September 2005 have been adjusted accordingly to allow for relevant
comparison. However, historic consolidated numbers for Telefonica O2 Czech
Republic/Cesky Telecom Group remain unchanged and mobile ARPU has not been
adjusted for inter-segment revenues.
--------------------------------------------------------------------------------
In conjunction with the re-branding, Telefonica O2 Czech Republic also launched
a number of new products and services in the quarter including:
• O2 TV, a new IPTV service currently available to more than 1 million fixed
lines in Prague, Brno, and many other cities. Using the Imagenio platform
developed by Telefonica, customers can access hundreds of movies, and a wide
selection of TV channels and radio stations, as well as Videoteka (the
Library), a virtual video rental shop and TV Archiv (TV Archive) which
enables customers to watch films, serials, or sports broadcasts that they
have missed, for up to seven days. There are two basic programme packages,
along with six additional programme offers. Launched on 1 September, by late
October O2 TV had gained 5,000 customers.
• O2 Simple, two new tariffs where customers select the amount they want to
spend - CZK240 or CZK 600 - and receive an additional bonus of CZK20 or
CZK40 per month, which is then set against voice and SMS usage. Customers no
longer have to worry about how many minutes or SMS they should select in a
tariff package, and how many they use.
• O2 Lollipop - all new and existing customers who combine two services
provided by O2 with a third receive a bonus of CZK2000, which is deducted
from mobile bills over a 12 month period. To be eligible for the discount,
customers must actively use at least one mobile tariff and a fixed line in
combination with a specified additional service, including Internet access
(O2 Internet Expres or mobile access) or O2 TV.
O2 Airwave
O2 Airwave continues to perform well, making good progress on delivering the
Airwave service to new customers and securing additional contracts, and remains
a valuable part of the group. Following the successful conclusion of contract
negotiations to equip all Fire and Rescue Services across Wales and Scotland
with a resilient and secure voice and data communications service, as announced
in the second quarter, Airwave signed a 10 year contract with the Scottish
Ambulance Service, worth almost £50 million, to use the Airwave service. The
Welsh Ambulance Service is expected to finalise contract negotiations in the
near future.
The rollout of Airwave to Ambulance Trusts in England is progressing well with 3
Ambulance Trusts now at Ready for Service (RFS) - this marks completion of the
first key milestone in the Ambulance Programme.
During the quarter Airwave acquired Decision Focus, the world's leading provider
of TETRA radio management applications with a proven track record of success
with public safety customers. Its market leading capabilities in radio and
mobile asset management and TETRA fleet mapping make it a valuable addition to
Airwave. Decision Focus also has a strong process consulting capability and
provides process redesign and implementation services to a wide range of
customers over a number of sectors, helping them reduce costs and improve
operational effectiveness. Decision Focus has approximately 80 customers
throughout the UK and worldwide, the majority of whom operate solely in public
safety.
Airwave now has over 200,000 users on the network and is supplying service to
over 200 public safety and other organisations.
OUTLOOK2
• O2 UK
Given the continued high rate of growth in the customer base, O2 UK's service
revenue growth is now expected to be in the range 14% - 15% for the 11 months
ended 31 December 2006. Given this higher rate of growth, and the increasingly
competitive nature of the UK market, OIBDA margin for the 11 months ended 31
December 2006 is now expected to be around one percentage point lower than for
the comparable period last year.
• O2 Germany
O2 Germany's service revenue growth is now expected to be in the high single
digits for the 11 months ended December 2006, from low double digits previously.
OIBDA margin for the 11 months ended December 2006 is expected to be stable, as
previously guided .
• Capital expenditure for O2 Group
Capital expenditure for the O2 group, excluding acquisitions, is expected to be
in the middle of the range €2.0 - €2.3 bn for the 11 months ended December 2006.
• Telefonica O2 Czech Republic
Group revenues in the 12 months to 31 December 2006 are expected to reach the
same amount as in 2005, in local currency. OIBDA for the 12 months to 31
December 2006 is now expected to grow by around 2%, in local currency, compared
to the same period in 2005, from flat as previously guided. Capital expenditure
guidance is confirmed in the region of €225 million for the full year.
--------------------------------------------------------------------------------
2 2006 guidance assumes constant exchange rates as of 2005, and excludes changes
in consolidation. Operating Income before D&A excludes other exceptional
revenues/expenses not foreseeable in 2006. For comparison, the equivalent other
exceptional revenues/expenses registered in 2005 are also deducted from reported
figures. Guidance for O2 Group does not include O2 Telefonica Czech Republic and
Telefonica Deutschland, and guidance for O2 Germany does not incorporate
Telefonica Deutschland. For O2, the fiscal year corresponds to the
February-December period.
--------------------------------------------------------------------------------
1. Customer numbers
Mobile Customers at Customers at Customers at Customers at Net additions Customers at
30 September 31 December 31 March 30 June during period 30 September
2005 2005 2006 2006 2006
000's 000's 000's 000's 000's 000's
O2 UK
Pre-pay 9,858 10,479 10,654 10,940 316 11,256
Post-pay 5,228 5,502 5,686 5,874 208 6,082
Total 15,086 15,981 16,340 16,814 524 17,338
O2 Germany
Pre-pay 4,254 4,799 4,987 5,143 198 5,341
Post-pay 4,692 4,970 5,112 5,192 96 5,288
Total 8,946 9,769 10,099 10,335 294 10,629
O2 Ireland
Pre-pay 1,148 1,173 1,154 1,147 (12) 1,135
Post-pay 422 429 439 452 16 468
Total 1,570 1,602 1,593 1,599 4 1,603
Manx
Pre-pay 45 45 45 47 1 48
Post-pay 21 22 22 22 - 22
Total 66 67 67 69 1 70
O2 Czech Republic
Pre-pay (1) 3,101 3,130 3,052 3,043 (65) 2,978
Post-pay 1,388 1,546 1,643 1,727 55 1,782
Total 4,489 4,676 4,695 4,770 (10) 4,760
O2 Group
Pre-pay 18,406 19,626 19,892 20,321 437 20,758
Post-pay 11,751 12,469 12,902 13,267 375 13,642
Total 30,157 32,095 32,794 33,588 812 34,400
Pre-pay
percentage 61.0% 61.1% 60.7% 60.5% 53.8% 60.3%
Post-pay
percentage 39.0% 38.9% 39.3% 39.5% 46.2% 39.7%
(1) 13 month active customer base
1. Customer numbers (continued)
Fixed Customers at Customers at Customers at Customers at Net additions Customers at
30 September 31 December 31 March 30 June during period 30 September
2005 2005 2006 2006 2006
000's 000's 000's 000's 000's 000's
O2 Czech Republic(1)
Fixed telephony 3,003 2,908 2,817 2,666 (129) 2,537
Internet and
data 621 606 589 563 (8) 555
Of which ADSL 176 226 283 326 38 364
Pay TV 0 0 0 0 3 3
Total Retail 3,624 3,514 3,405 3,229 (134) 3,095
Wholesale ADSL 45 48 55 60 3 63
Total Wholesale 56 62 71 79 6 85
Total Accesses 3,680 3,576 3,476 3,308 (128) 3,180
Manx Telecom
PSTN 61 61 60 60 1 61
ADSL 7 8 8 9 1 10
1. Definition of fixed telephony accesses now excludes 'incoming only' lines.
2. Average revenue per user (ARPU)(1) - £
30 September 31 December 31 March 30 June 30 September
2005 2005 2006 2006 2006
£ £ £ £ £
O2 UK
Quarterly monthly average
Pre-pay 12 12 12 12 12
Post-pay 44 43 42 43 43
Blended 23 23 22 23 23
O2 Germany
Quarterly monthly average
Pre-pay 7 7 6 6 6
Post-pay 30 28 26 27 28
Blended 19 18 17 17 17
O2 Ireland
Quarterly monthly average
Pre-pay 21 21 20 20 20
Post-pay 62 60 60 61 57
Blended 32 31 31 32 31
O2 Czech Republic
Quarterly monthly average
Pre-pay 6 6 5 6 6
Post-pay 26 25 24 24 24
Blended 12 12 12 12 12
1. ARPU definition used by Telefonica has been adopted by all businesses.
3. Data ARPU(1) (quarterly monthly average) - £
30 September 31 December 31 March 30 June 30 September
2005 2005 2006 2006 2006
£ £ £ £ £
O2 UK 6.4 6.8 6.7 6.9 7.2
% non-SMS data 12.4% 12.2% 12.5% 13.3% 13.1%
O2 Germany 4.4 4.2 4.1 3.7 3.9
% non-SMS data 21.0% 21.7% 23.0% 21.5% 21.4%
O2 Ireland 6.4 6.5 6.5 6.5 6.7
% non-SMS data 8.8% 11.8% 13.8% 15.6% 18.4%
O2 Czech
Republic 2.4 2.6 2.5 2.5 2.6
% non-SMS data 40.6% 40.2% 39.1% 38.7% 43%
(1) ARPU definition used by Telefonica has been adopted by all businesses
4. Average revenue per user(1) (ARPU) - €uro
30 September 31 December 31 March 30 June 30 September
2005 2005 2006 2006 2006
€ € € € €
O2 UK
Quarterly monthly average
Pre-pay 17 17 17 17 18
Post-pay 65 64 62 63 64
Blended 33 33 32 33 34
O2 Germany
Quarterly monthly average
Pre-pay 11 10 9 9 9
Post-pay 44 41 39 39 41
Blended 28 27 24 24 25
O2 Ireland
Quarterly monthly average
Pre-pay 31 31 29 29 30
Post-pay 91 88 87 88 83
Blended 47 46 45 46 45
O2 Czech Republic
Quarterly monthly average
Pre-pay 9 8 8 8 9
Post-pay 38 37 35 35 35
Blended 17 18 17 18 18
Quarterly rates
EUR/GBP 1.4633 1.4701 1.4576 1.4530 1.4706
CZK/EUR 29.677 29.298 28.600 28.384 28.330
1. ARPU definition used by Telefonica has been adopted by all businesses
5. Data ARPU(1) (quarterly monthly average) - €uro
30 September 31 December 31 March 30 June 30 September
2005 2005 2006 2006 2006
€ € € € €
O2 UK 9.4 10.0 9.8 10.0 10.6
% non-SMS data 12.4% 12.2% 12.5% 13.3% 13.1%
O2 Germany 6.4 6.1 5.9 5.4 5.8
% non-SMS data 21.0% 21.7% 23.0% 21.5% 21.4%
O2 Ireland 9.8 9.6 9.5 9.5 9.9
% non-SMS data 8.8% 11.8% 13.8% 15.6% 18.4%
O2 Czech
Republic 3.5 3.8 3.7 3.7 3.8
% non-SMS data 40.6% 40.2% 39.1% 38.7% 43%
1. ARPU definition used by Telefonica has been adopted by all businesses
6. Average revenue per user(1) (ARPU) - CZK
30September 31December 31March 30June 30September
2005 2005 2006 2006 2006
CZK CZK CZK CZK CZK
O2 Czech Republic
Quarterly monthly average
Pre-pay 254 243 226 239 243
Post-pay 1,137 1,078 996 989 989
Blended 519 514 490 507 519
(1) ARPU definition used by Telefonica has been adopted by all businesses
7. Data ARPU(1) (quarterly monthly average) - CZK
30September 31December 31March 30 June 30September
2005 2005 2006 2006 2006
CZK CZK CZK CZK CZK
O2 Czech
Republic 104 110 106 104 108
% non-SMS data 40.6% 40.2% 39.1% 38.7% 43%
(1) ARPU definition used by Telefonica has been adopted by all businesses
8. Minutes of Use (quarterly monthly average)
30 September 31 December 31 March 30 June 30 September
2005 2005 2006 2006 2006
O2 UK 158 165 162 169 175
O2 Germany 118 124 127 128 124
O2 Ireland 222 224 220 237 241
O2 Czech
Republic 94 97 96 102 102
9. SMS messages
3 months ended: 30 September 31 December 31 March 30 June 30 September
2005 2005 2006 2006 2006
million million million million million
O2 UK 3,436 3,908 4,070 4,368 4,651
O2 Germany 712 746 742 727 727
O2 Ireland 362 384 376 392 397
O2 Czech
Republic 633 685 690 692 698
Manx 11 11 11 12 12
O2 Group 5,154 5,734 5,891 6,191 6,485
O2 Contacts:
Richard Poston John Crosse
Director, Corporate Affairs Investor Relations Manager
O2 plc O2 plc
richard.poston@O2.com john.crosse@O2.com
t: +44 (0)1753 628039 t: +44 (0)1753 628198
David Nicholas
Communications Director
O2 plc
david.nicholas@O2.com
t: +44 (0) 771 575 9176
Simon Gordon
Head of Media Relations
O2 plc
simon.gordon@O2.com
t: +44 (0)771 007 0698
O2 press office: 01753 628402
All O2 Group news releases can be accessed at our web site: www.O2.com
This information is provided by RNS
The company news service from the London Stock Exchange
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