More customers doesn’t mean more income
Britain’s second biggest mobile carrier O2 witnessed an 8.5 per cent drop in revenues in Q4 2012, despite signing up 282,000 new customers over the period – more than either of its main two rivals.
It’s the second successive drop for the carrier, owned by Spain’s Telefonica, which blamed the Q3 drop on customers delaying renewal of contracts ahead of Apple’s iPhone 5 launch.
This time price wars, enforced cuts to charges and consumers spending less on voice calls and text were cited as behind O2′s revenue decline, though the company says that at the end of last year it still had 23.8 million customers compared to EE’s 26.8 million and Vodafone’s 19.5 million.
CEO Ronan Dunne pointed out that even without 4G it had managed to attract more new customers than its two main competitors EE or Vodafone, adding:”I think anyone who was going to go first [with 4G] was going to have some challenges creating and educating the market.”
Meanwhile O2′s parent Telefonica, which has operations accross Europea as well as in Latin America, saw profits fall by 27 per cent after it wrote down the value of its Irish operations and a stake in Telecom Italia. Revenues were flat, with a 6.5 per cent decline in Europe eased by improving sales in Latin America.
* Deutsche Telekom says a flotation of the UK’s biggest mobile phone company, EE, will not happen until the end of this year at the earliest. The German giant owns half of EE along with France Telecom, but is looking to float a minority stake in the owner of the Orange and T-Mobile brands.
“If we are to have an orderly, solid preparation, then the fourth quarter is the first in which we can think about it,” Deutsche Telekom’s chief financial officer Timotheus Hoettges said, adding that a float is not a certainty and depends on market conditions.