August 28, 2012

O2 Sees Best Ever Small Business Connections Growth

O2 has seen its best ever results for growth in small business connections

O2 has seen its best ever results for growth in small business connections

While O2 saw its best quarter for small business connections, margins, operating income and service revenue had all dropped in the latest figures released for the three months up to June 30.

But O2 did see the rate of decline slow in comparison with results for the first quarter. Dunne stated: ‘We’ve stabilised the revenue trend.’

The operator’s CEO said the company is still feeling the effects from a lack of business growth during the previous financial year, along with the effects of changes to mobile termination rates (MTRs).

Increased competition from O2 has been cited by both Vodafone and Everything Everywhere as affecting their results, but Dunne said the business wasn’t price-oriented. He added that the company was providing ‘innovations around tariffs’ with examples such as its On & On unlimited texts and minutes tariff and Pay & Go Go Go, the prepay loyalty tariff.

Dunne said O2 was not a price leader and never had been. He cited offers such as T-Mobile’s The Full Monty that had taken value out of the market, to which O2 had to respond.

He said the operator wanted to offer better ranges to its customers, rather than focusing solely on price. ‘If other [operators] have less in differentiation then they will have to be price oriented,’ he said. Adding that he had no wish to be part of a ‘price war’. ‘We want to offer value but it’s through people saving with Priority Moments or O2 Recycle.’

For the period of three months up to 30 June, service revenue fell by 8.1% to €1.5bn, or 5% excluding the effects of MTR changes. Operating income before depreciation and amortisation (OIBDA) dropped 20.3% to €402m. Average revenue per user (ARPU) also fell by 8.8% to €22.40.