O2 posts mixed results amidst iPhone hype

29-02-2008

by Emmet Ryan

Amidst the excitement of its iPhone coup on Thursday O2's latest results went largely unnoticed as the mobile operator posted a mixed bag of numbers.

Service revenue at the mobile operator was up 3.7 percent to EUR231 million in the quarter ending 31 December compared with the same period in the previous year. Customer numbers were up 0.9 percent to 1.65 million, a new all-time high for O2 Ireland. This included a net gain of 22,000 new post pay customers in the quarter.

It wasn't all good news though as monthly average revenue per user (ARPU) for the quarter was down from EUR47 in the previous quarter to EUR45.70, albeit up from EUR45 in the same period last year. ARPU for post pay customers was EUR78.80, down from EUR84.90 in the previous quarter and from EUR81.40 in the corresponding quarter last year. Monthly average ARPU for prepay customers was EUR29, down slightly from EUR29.20 in the previous quarter and from EUR29.60 in the year-ago quarter.

"The Irish mobile marketplace continues to be extremely competitive and challenging. While O2 customers have benefited from a number of value-led propositions, this has contributed to a slight fall in ARPU in our latest quarterly figures," said Paul Whelan, chief financial officer with O2 Ireland. "Data revenue continues to grow, and is indicative of the take up of new data services such as O2 broadband and the increasing adoption of mobile office products amongst business customers."

While O2 may sound pleased with the figures, their move to claim the iPhone shows they're reaching for more. Whether the Apple-based device can be a Messiah for the mobile operator remains to be seen. On one hand it gives O2 an immediate edge on its rivals. The mobile operator has the hottest gadget to hit the market in recent memory and the only way to get hold of it legitimately is by being an O2 customer.

Yet the iPhone has already been through its first cycle of hype in the US with its initial launch, and its second, when it became available in Europe. While it will no doubt still prove popular with Irish users when it launches there are drawbacks to such a lengthy gap between global launch and its arrival on these shores. Many hardcore iPhonatics have already got their paws on the device from elsewhere, while the less die-hard mightn't be as pushed about it now as they were eight months ago. These factors could lessen the impact the phone could have in growing O2's overall customer base and revenue streams.