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ISP O2 UK Suffers Another Sharp Broadband Subscriber Decline to 579500

Wednesday, Nov 7th, 2012 (7:56 am) - Score 1,265

Mobile operator and ISP O2 UK (BE Broadband) has released its latest financial results to the end of September (Q3-2012), which revealed yet another fall in their fixed line broadband ISP subscriber base to 579,500 (down by -22,500 in the quarter). This is even worse than the -15,800 lost during Q2-2012.

Unfortunately the ISP suffered all sorts of fixed line broadband performance and quality problems during the first half of 2012. On top of that customers have been continually frustrated by O2 and BE’s inability to launch a superfast broadband service or to even set a clear date for its arrival (O2 is now the only big ISP without a superfast package), which is probably contributing to their decline.

History of O2’s Fixed Line Broadband Decline
March 2010 – 632,400
June 2010 – 650,001
September 2010 – 663,800
December 2010 – 671,600
March 2011 – 669,200
June 2011 – 652,900
September 2011 – 625,300
December 2011 – 620,300 (-5,000)
March 2012 – 617,800 (-2,500)
June 2012 – 602,000 (-15,800)
September 2012 – 579,500 (-22,500)

One small glimmer of hope has come from their fixed line phone business, which saw its subscribers increase to 362,800 (up +24,600 in the quarter); although it’s not known whether this has been fuelled by new subscribers or existing fixed line broadband customers. As ever O2’s primary focus is on its mobile business and as a result their fixed line platform appears to be receiving less attention.

O2 Statement

Commercial momentum from the first half of 2012 was maintained in the third quarter, in a highly competitive market. In parallel, the Company’s focus on efficiency and lower trading activity in upgrades has led to improving year-on-year OIBDA trends and OIBDA margin, with both metrics also growing sequentially in the third quarter.

Total access base reached 23.5 million at the end of September 2012 (+2% year-onyear). The mobile customer base stood at 22.5 million at the end of September 2012 (+1% year-on-year), with the mobile contract customer base being the driver of this growth (+8% year-on-year).

Revenues totalled 5,234 million euros in the nine months to September (-5.6% year-onyear), while operating expenses grew 0.5% year-on-year in the first nine months, with commercial cost stable. As a result, OIBDA totalled 1,190 million euros in the first nine months, with a significant improvement in the third quarter (-10.2% year-on-year in the quarter; -21.4% in the nine months to September). CapEx reached 544 million euros in the nine months to September 2012 (flat year-on-year).

Speaking of mobile services, O2’s 3G coverage has now been extended to reach over 90% of the UK and it plans to launch 4G (LTE) superfast Mobile Broadband services in the first half of 2013, which is thanks to a recent industry agreement that allowed Ofcom’s auction of the related 800MHz and 2.6GHz bands to be moved forward by five months.

Similarly O2’s network sharing agreement with Vodafone was recently cleared by the Office of Fair Trading, which allows them to strengthen their existing collaboration, broaden coverage and lay the foundations for a joint 4G network.

By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook and .
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