ISP O2 UK and BE See Slower Decline to 617800 Broadband Subscribers

Mobile operator and ISP O2 UK (Telefonica) has today released its latest quarterly results to the end of March (Q1-2012), which revealed that their fixed line broadband subscriber base (includes BE Broadband customers) had continued to decline by -2,500 (net) between Q4-2011 and Q1-2012 to reach a new total of 617,800.

The change represents another slight improvement on the -5,000 lost during Q4-2011 and the -27,600 in Q3-2011, although recent problems with the broadband platform (here) and a delay to the ISPs plans for a superfast broadband launch this year (here) could hamper any future efforts to boost fixed broadband growth.

Telefonica Statement (O2 UK)

In the first quarter of 2012 Telefónica UK continued executing its strategy to regain commercial momentum in a very competitive marketplace, leading to a significant increase in commercial activity resulting in the highest quarterly contract net additions since 2010. The Company continued its focus on the retention and acquisition of high-value smartphone customers, which, coupled with the on-going success of its smartphone tariffs, drove strong contract base growth and positive contract churn evolution.

As a result, the total access base grew 1% to stand at 23.3 million at the end of March 2012, on the back of stable mobile base and positive fixed telephony growth which compensated a year-on-year decline in retail broadband fixed internet accesses.

The mobile contract base rose steadily, increasing 5% year-on-year to account for 50% of the total mobile customer base, which reached 22.3 million at the end of March 2012. Smartphone penetration increased to 41% in the first quarter.

Revenues totalled 1,719 million euros in the three months to March 2012 (-6.0% yearon-year) impacted by a difficult trading environment and regulation. Excluding the impact from mobile termination rate cuts, revenues would have decreased 3.0% year-on-year in the first quarter, stabilising its year-on-year trend.

On a brighter note O2/BE’s fixed line phone customers continued their strong growth from 216,100 in Q4-2011 to a whopping 315,800 in Q1-2012. The operator is now known to be putting most of its focus on future “4G” Mobile Broadband services.