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O2 Reports Q2

Telefónica O2 revenues grow in the UK, Ireland, and Czech Republic, fall 2.9 percent in Germany

July 30, 2007

3 Min Read

LONDON -- Key performance indicators at 30 June 2007:

Total revenue (in local currency)1:

  • O2 UK total revenue grew by 10.6%;

  • O2 Germany (including Telefónica Deutschland) total revenue fell by 2.9%;

  • O2 Ireland total revenue grew by 3.9%;

  • O2 Czech Republic group2 total revenue grew by 4.0%



1 Comparative period is 3 months to 30 June 2006.
2 O2 Czech Republic group consist of Telefónica O2 Czech Republic and Telefónica O2 Slovakia

Mobile average revenue per user (monthly, in local currency):

  • O2 UK blended ARPU £23.4 (Q1 2007: £22.3; Q2 2006: £22.8)

  • O2 Germany blended ARPU €20.9 (Q1 2007: €20.5; Q2 2006: €24.2)

  • O2 Ireland blended ARPU €46.7 (Q1 2007: €44.2; Q2 2006: €45.8)

  • O2 Czech Republic ARPU CZK 524 (Q1 2007: CZK 496; Q2 2006: CZK 507)Mobile data in the first quarter



Group SMS volumes grew by 15% year on year to 7.10 billion messagesPeter Erskine, Chairman & Chief Executive of Telefónica O2 Europe, commented:“Against the backdrop of highly competitive European markets, O2 has built on its robust start to the year, adding 534,000 mobile customers in the second quarter, taking the total mobile customer base to 36.4 million, 8.4% higher than last year.

In the UK, the momentum of the first quarter was maintained, with double digit revenue growth and 34,000 net new customers, including 76,000 on contract, helped by migrations from prepay. Blended monthly ARPU growth of 2.8% year on year illustrates that we are successfully focusing on higher value customers and our total customer base of 17.785 million remains the largest active base in the market. Upgrades in the quarter increased by 26% compared to last year, while OIBDA margin improved from the first quarter.

In Germany, customer growth in our mobile business accelerated in the second quarter, reflecting the initial impact of our new growth initiatives. 374,000 net new mobile customers were added in the quarter, an increase of 58% compared to the same quarter last year, with 51% on contract, taking the total base to 11.558 million, representing 11.8% year on year growth. The market continues to be challenging, with blended monthly ARPU down 13.5% year on year, but stable quarter on quarter at €20.9, with minutes of use growing 3% quarter on quarter. Our wholesale DSL business continues to perform well, with equivalent lines in service reaching over 796,000 at the end of June, almost double the June 2006 figure, and remains on target to reach OIBDA breakeven on a monthly basis before the end of the year. We will more aggressively market our O2 DSL service during the second half of the year, with new campaigns starting this month, to increase customer growth.

In the Czech Republic the business has built on its strong start to the year, delivering 4% group revenue growth in the second quarter, with over 6% growth in the mobile business and positive growth in the fixed business, continuing the trend seen in the first quarter. The mobile business in Czech Republic added 55,000 net new customers in the quarter, with 111,000 on contract, raising the percentage of contract customers in the base to 42.4%, compared to only 36.2% at the end of June 2006. In our fixed line business, the total number of ADSL lines stood at 526,000 at the end of June, compared to 386,000 at the same time last year.

In a competitive market O2 Ireland traded well, adding 14,000 net new contract customers and ending the quarter with a total customer base of 1.631 million, 2% higher than at the same time last year. We are excited about the launch of our mobile broadband product in Ireland, utilising our HSDPA network, as a real alternative to fixed broadband in the home, in a market that is under penetrated and has good growth potential.

Overall guidance for the Telefónica O2 Europe group remains unchanged for the full year.”

Telefónica Europe plc (O2)

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