O2 Unveils Q1 KPIs

LONDON -- Peter Erskine, Chairman & Chief Executive of O2, commented:
"We are pleased that the strong momentum in all O2's businesses has been maintained within the Telefonica Group. Across O2, now including the Czech Republic, we added 699,000 mobile customers, taking the total mobile customer base to 32.794 million, 16% higher than last year.

In the UK we added 359,000 net new customers, growing the base by 14% year on year. We were particularly pleased by another robust performance in the contract market with a record number of upgrades, driven by our O2 "Treats" initiative, resulting in a continued improvement in contract churn.

In Germany we added 330,000 net new customers in the quarter taking the total base to over 10 million, representing 27% year on year growth. This growth was maintained in an increasingly competitive market which, along with termination rate cuts, contributed to lower ARPU, but the strength of the brand and a range of new propositions continued to attract high-value customers to O2, with 43% of net connections in the quarter on contract. Our Tchibo joint-venture continued to perform well, adding 68,000 customers.

In the Czech Republic Eurotel added 19,000 net new customers, growing its customer base 9% year on year. Contract customers accounted for 35% of the total base at the end of the quarter, compared to only 26.5% at the end of March 2005, driven by a successful pre-pay to contract migration strategy. In our fixed line business, the total number of ADSL lines stood at 338,000 at the end of the quarter and last month we announced this had increased to 350,000."

Key performance indicators for the three-month period ended 31 March 2006:

Service revenue (at constant currency):

Average revenue per user (12 month rolling ARPU):

Telefónica Europe plc (O2)