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UPDATE ISP O2 UK Sees Home Broadband Subscribers Fall to 560100

Thursday, February 28th, 2013 (7:30 am) - Score 1,567

Mobile operator and ISP O2 UK (BE Broadband) has suffered another painful quarter after their latest results for Q4-2012 showed that its fixed line home broadband subscriber base had fallen by -19,400 in the quarter to reach a new total of 560,100 customers. Meanwhile rumours of a sale to BSkyB continue to persist.

The recent fall follows a generally frustrating performance for O2’s home broadband platform in 2012, which was fuelled by continued concern over price, poor network performance (routing problems) and the on-going lack of superfast broadband. Recent concern about network congestion (here), GoldenEye’s piracy letters (here) and efforts to disconnect heavy users also haven’t helped (here).

History of O2s Fixed Line Broadband Decline
December 2010 – 671,600 (largest peak)
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)
December 2012 – 560,100 (-19,400)

But the bad news often overshadows the providers other merits, such as the fact that it usually has proportionally more satisfied customers than most of the other big ISPs. Similarly O2/BE’s fixed line phone business once again saw its subscribers increase to 377,400 (up +14,600 in the quarter, although this is less than the +24k added in Q3-2012).

O2 (Telefonica UK) Statement

Revenue trend has improved quarter by quarter since the fourth quarter of 2011 from -6.8% year-on-year to -3.2% in the fourth quarter of 2012 to total 7,042 million euros in 2012 (-5.0% year-on-year), on the back of solid mobile service revenues, resulting in a sequential improvement ex-regulation year-on-year (+0.5% in the fourth quarter).

OIBDA totalled 1,601 million euros in 2012, with a sequential improvement in the fourth quarter. CapEx stood at 748 million euros in the year to December 2012 as the Company continued to focus on increasing its 3G coverage and capacity, resulting in O2 UK having the least complained about network.

O2 (BE) now finds itself in a difficult position. On the one hand it needs to invest heavily in their forthcoming 4G based Mobile Broadband products, while on the other they’ve been left trailing the rest of the market due to a lack of superfast broadband services and no TV solution (not that TV itself is a requirement but it has become more important to the big operators).

The good news is that they do plan to make an announcement about their superfast/FTTC strategy in the summer. The bad news is that instead of leading the pack, much as they did with ADSL2+ some years back, they’re now already a year behind most of their main rivals and will be even further behind come the summer. The focus is clearly on 3G and 4G.

Meanwhile a number of normally reliable sources have this week continued to fuel on-going rumours, which first sprang up during January (here), that O2 and BSkyB have allegedly held discussions concerning the future of the operators Home Broadband platform.

The supposed deal, which could complete around summer 2013 (after the migration to the new BE/O2 converged core network), would involve BSkyB “managing the existing platform“. As usual neither BSkyB nor O2 were willing to comment. Take with a big pinch of salt.

UPDATE 1:01pm

Our sources indicate that O2 are planning another advertising campaign to help push their struggling Home Broadband services, which will hit in April 2013. At this stage we don’t yet know whether the ISP intends to push a new product or to merely promote its existing service.

Leave a Comment
11 Responses
  1. Avatar Ignitionnet says:

    Taken with a big pinch of salt, the salt just enhanced the flavour 🙂

  2. Avatar David says:

    The biggest mistake was not getting into FTTC/FTTP quick enough, Soon as that was rolling by BT, everyone jumped ship.

  3. Avatar keith says:

    “The bad news is that instead of leading the pack, much as they did with ADSL2+ some years back”

    Is that myth BE and its supporters came up with still being believed?
    http://news.bbc.co.uk/1/hi/technology/4422098.stm

    “BSkyB have allegedly held discussions concerning the future of the operators Home Broadband platform.”

    Hopefully they take over the customer base entirely much like Talk Talk do when they assimilate other ISPs and they lousy call centre staff BE have will be out of a job, the oversubscribed, badly routed network they have no longer used and in general this pathetic bunch is just written off and within a year nobody but the die hards remember them.

    “The good news is that they do plan to make an announcement about their superfast/FTTC strategy in the summer.”

    They promised the same nonsense last year and then fobbed people off trying to keep them as customers with the…. ‘Fibre is coming’ yarn, until that yarn was no longer believed even by the fan boys and the company head admitted it was not coming.

    If they were a knackered horse the would had been shot and turned in to a Big Mac long ago.

  4. Avatar cyclope says:

    Well i don’t use salt,But i fail to see what sky would want with this so called converged core network, it would be of little use to them,

    Eaynet (ukonline)had a LLU presence in 40% or more of the uk when this over rated hyped ISP was only in it’s nappies serving inner london only, O2 killed off any chance of BE becoming anything bigger,They may of invested into it at first, but the man from telefonica he say no to FTTC

    And no FTTC/H isn’t the underlying reason why so many customers left the sinking ship,It’s more that down to how inept they are at tracing networking problems and then taking an age to finally fix them,then there’s selling something as unlimited that they later say isn’t unlimited, how can they get things so wrong and still be trading ?

  5. Avatar cyclope says:

    Also their network is also so congested that even the wholesale products are being adversly affected in some way or another,they must of nearley run it into the ground, due to starving it of funding for so long

    1. Mark Jackson Mark Jackson says:

      In fairness the primary issue only appears to be occurring in certain parts of the UK, so a lot of people are still getting a good service.

    2. Avatar keith says:

      Going to beusergroup.co.uk/archive.php and searching for the word “congest” would seem to indicate it is not just certain parts of the UK but scattered around the country. Some exchanges have had issues for considerable time (going on for a year) some so long not even the usergroup archive goes back far enough to mention all the exchanges which still have issues.

      Looking at their position on the Top ISPs on this very site i would not say many are ‘still getting a good service’. They dropped something like 5 positions just in the year i was with them.

      No doubt this year like prior years they will be sponsoring ISPA awards money well spent im sure 😉 There is nothing positive about them.

  6. Avatar Keith says:

    The “everyone has left to get fibre from elsewhere” excuse is nothing more than another myth peddled by BE staff and their merry posse of fan boys which know sweet FA about anything. I for one ditched BE and went to a competitor and am still on an ADSL2+ service even though i could have FTTC. Could not stand dealing with the idiots any further.

    I ditched them because their staff have no clue at all about anything (nadda, zip zero). They make threats to remove you from their forum if you complain about problems with the service. I had a PM warning that i would be banned from them and their pathetic forum for complaining, never went back, a fine welcome that was to their shoddy product.

    The place is full of silly little Die hard fan boys, usergroup individuals and idiot staff that do not even look in to issues until a swarm of complaints about the same things start. They just blame the end user (try the bebox being a fave excuse) up until they cant deny issues further when several all start moaning about the same issues.

    In my near 20 years of having the internet i have never ran across an ISP which is so inept and i hope i never do again. They are liars, lazy and quite frankly if they all end up out of a job and on the streets it will be too good for them.

  7. Avatar Jonny says:

    Am guessing here and I might be wrong, Keith from (UK)above did not have a good experience whilst with Be*

    I have on the whole a good experience but only have a 4mb connection due to the 5km line from the exchange. I am waiting for this announcement as well, and since my fibre has been put back another 13 months it looks like I’ll be jumping off sometime later this year. Be* do leave me alone, and my exchange is nowhere near congested like others, more like 50% max usage. So am left alone like I said, apart from my support calls I’d never hear from them. Which is just how I like it.

    No fibre does sadden me, with Be* at least. But now I have another 13 months to wait I can allow Be* a little more time.

  8. Avatar cyclope says:

    @ Mark (admin) The congestion hasn’t only affected a small number of the retail customers the well publisied BBC/CDN/PEERING/ Core Network capacity issues lasted nearly 6mths, and even now they still are affecting customers albeit on a smaller scale, but buffering on the BBC Iplayer or 5-10 pauses whilst the CDN is switched to one that has sufficient resources still previals, it’s laughable if you ain’t affected by it But telefonica don’t care, and wont invest , this new “converged core”(what ever that is) will do nada to reduce contention on the backhaul data links from exchanges as they will not be upgraded ,So how are they ever going to be able support FTTC nevermind FTTH ?

    They aint is the simple answer, all they will say in their next statement on this is spout some more bull excriment,

  9. Avatar Sheffield Owl says:

    My own experience with being with O2 for 3 years was very good.The price was excellent,the product was unlimited and their support was excellent.The problem in my case was I live a long way from the exchange so only managed around 2mb,which wasn’t O2’s fault.
    I am now with Origin BB(one of the Digital Region isp’s) and now get via a fibre connection 24mb down and 10 mb up.

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