O₂ increases revenue and profitability

"These figures reflect that we have continued to stay on the growth track even despite the economic slump in Germany and have been able to carry on increasing the profitability of our business", said Jaime Smith, the CEO of Telefónica O₂ Germany. The positive results prove the success of the strategy of O₂ which is focused on more customer orientation, increased services and the consistent expansion of the network infrastructure. At the same time, the company was able to substantially reduce customer acquisition costs through the SIM-Only campaign launched in the previous quarter. The strategy is focused on the new O₂ o tariff initiated in May and aims to break up market structures in Germany and acquire new customers over the next couple of months. Data services drive growth Data services fuelled growth in the first quarter of the year under review. In the first three months of 2009, the mobile data volume revenue (without SMS messages) climbed 26 percent. "Among new customers, we have gained above average market shares with our data sticks and mobile data offers", Smith emphasized. After investing billions of Euros, it now pays off that O₂ operates one of the most modern and most rapid networks in Germany. "We expect enormous growth potential for mobile data use", says Smith. Number of customers and revenue 7.1 million customers of a total of 14.7 million customers had postpaid mobile telecommunication contracts in the first quarter (+10 percent compared to the same quarter of the previous year) and 7.4 million customers had prepaid contracts (+13 percent). The number of O₂ DSL customers increased by 86 percent to 232,000 compared with the previous year. The partner business generated growth, too. Successful cooperations with Hansenet, Tchibo, M-Net, Schlecker and the discount brand Fonic resulted in more than 115,000 new customers in the first quarter. The DSL wholesale business which is currently operated by the subsidiary company Telefónica Germany and to be integrated into Telefónica O₂ Germany by the middle of the year performed very positively. The number of unbundled DSL broadband connections (ULL) distributed by the partners United Internet, Hansenet, Freenet and by O₂ amounted to 1.4 million at the end of the quarter - a rise of 71 percent compared to the same quarter of the previous year. The overall revenue developed positively even in spite of the generally weak economy. Accordingly, Telefónica O₂ Germany and Telefónica Germany generated revenues of € 886 million in the first three months - an increase of 3.6 percent compared with the same quarter of the previous year. The solid development of the mobile services revenue was positive for the second time in a row increasing by +0.6 percent to € 695 million in the quarter under review. The average monthly revenue per mobile customer (Average Revenue per User - ARPU) decreased to € 15.9 in the first quarter (-11 percent compared with the same quarter of the previous year). The reason for the decline was the conversion of customers to cheaper tariffs which has been completed in the meantime. Shop expansion and investments Telefónica O₂ Germany continued to expand the sales network in the first three months of this year by opening 30 new shops. The company invested € 184 million in the first quarter, primarily in the expansion of the network. The expansion will be completed by the end of the year. Already today, O₂ operates one of the most modern and most rapid mobile telecommunication networks in Europe covering almost 100 percent of the population in Germany. Download: Table Business Development Q1 2009