Newspaper article The Evening Standard (London, England)

O2 Forges Ahead in UK as Rivals Ponder a Takeover; CITY BRIEFING

Newspaper article The Evening Standard (London, England)

O2 Forges Ahead in UK as Rivals Ponder a Takeover; CITY BRIEFING

Article excerpt


MOBILE phone giant O2 today revealed just why European competitors may still be eyeing a [pounds sterling]14 billion-plus takeover bid, as it yet again raised its forecasts for growth in its key UK market.

The company's UK customer base has climbed beyond 15 million for the first time, including more than 400,000 in the three months which end this Friday.

O2 shares hit a year's high of 162p yesterday before slipping back to 153p.

Chief executive Peter Erskine said: "We continue to perform well in a highly-competitive market with our active base growing to over 15 million customers, and we expect this business to deliver net service revenue growth of between 6% and 9% for the year."

That raises O2 's most recent forecast made in July, which predicted UK net revenue growth in " midsingle digits".

Erskine said: "Our strong momentum is being sustained in both the prepay and contract markets, and the customer retention programmes put in place at the start of the year are continuing to deliver."

He said most new business had been won from individual consumers and small companies, with the contract market for large corporate clients remaining intensely competitive.

People have stayed loyal to O2 rather than switching to rivals after it introduced the "Reward" scheme which hands back 10% of their top-up payments every three months. On the contract side, more people have switched to bettervalue 18-month contracts from 12-month ones.

Tesco, which uses O2 to run its virtual network, hit 750,000 customers in the quarter. These are not counted in the overall 15 million O2 customers.

But any takeover is as likely to be triggered by O2's German business.

This now has around 8.5 million customers, putting it in the top three in the country.

Erskine said there had been intense competition in the second quarter, with German firms launching promotions or price cuts "virtually every week". But he added that O2 continued to grow strongly and expected to carry on doing so in the second half of the year to March. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.