Strong Q3 for O2

O2’s third quarter results made surprisingly good reading – year on year growth of 14.9% for net service revenues in the UK, blended ARPU of £272 against £265 a year ago, 524,000 net new customers taking the base to 17.4m.
Chairman and Chief Executive Peter Erskine said: “This faster than expected growth has allowed us to again raise service revenue guidance, and we now expect 14% to 15% growth year on year for the 11 months to 31 December 2006”.

O2 UK’s own channels accounted for a growing percentage of total gross connections in the quarter, reaching 61%. O2 UK also completed the acquisition of The Link’s 293 stores during the quarter which, after disposals and the re-branding of selected locations, will grow O2’s retail channel to around 400 stores.

• O2 recently announced new roaming pricing with a headline message of “free incoming calls”.

Independent analysts at Pure Pricing have looked at what this means in practice, taking a holidaymaker in Spain as an example – a seven-day stay with one 120-second call made per day and one 180-second call received per day.

Based on standard pricing, O2 is up to £15 more expensive than other UK operators. But the new option reduces the cost of these calls by over £23 and makes O2 the most competitive offering, saving customers between £2 and £9 against the other networks.

Pure Pricing does point out that one disadvantage of the O2 offer is the £5 monthly charge; customers need to know how they will use their phone when roaming to guarantee some level of saving.

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