Data usage a saving grace for O2 as operating income falls
LOWER consumer spending and subsidising a surge in smartphone buyers before Christmas helped to sink operating income from the O2 mobile brand by 25pc to €206m in Ireland last year.
Releasing results yesterday, Spanish owner Telefonica said that its mobile service revenue in Ireland -- which excludes sales at its stores -- fell 13.1pc in 2011 to €677m and by 18pc in the fourth quarter.
Subscribers chatted less and contract customers, in particular, curtailed spending.
Total revenue, including retail sales, declined 14.4pc to €723m for the year. The results also show that O2's mobile customer base fell 4.3pc last year to 1.62 million subscribers.
The number of prepay customers fell 10pc to 870,100 last year, but O2 added 23,200 contract customers to bring the number to nearly 753,000.
The number of customers using O2's internet services more than doubled to 24,200.
The scale of the downturn in Ireland has impacted all the mobile operators, who've had to respond to thriftier consumers with more competitive offers.
Telefonica said the average monthly revenue (ARPU) per O2 user in Ireland fell 10.7pc in 2011 to €33.10. Among prepay users the fall was 12.4pc to €21.30 and for contract subscribers the decline was 12.9pc to €47.70.
It said that excluding substantial voluntary cuts in mobile termination rates, the ARPU decline in 2011 would have been 3.3pc, and 6.2pc in the last three months of the year.
But more use of smartphones helped to push its data ARPU 8.9pc higher during 2011 to €13.40. By the year end, about 42pc of that data revenue was from non-SMS text traffic.
It said that over 100,000 people are now using the O2 Money card to control spending.