O2 grows revenue and customer numbers as it prepares for ‘cautious’ 5G rollout
O2 revealed strong customer and revenue growth for 2018 today as revealed plans to bring 5G to the UK this year.
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The figures
The mobile operator added 501,000 net contract additions to bring its total base to 32.6m, with a contract churn rate of just one per cent.
Revenue rose 5.4 per cent to £6bn, boosted by higher value smartphone sales and the success of its customisable tariffs.
Operating income before depreciation and amortisation (OIBDA) rose almost 12 per cent year on year to £1.65bn.
Why it’s interesting
O2’s latest growth shows the company has benefited from its customer-led approach, according to independent telecoms analyst Paolo Pescatore.
The operator also revealed plans to bring 5G to the UK, with London, Belfast, Cardfiff and Edinburgh the first to get the new technology before it’s rolled out further from 2020.
It is also working on a 5G testbed for FTSE 100 companies, though chief executive of O2 owner Telefonica UK's chief executive, Mark Evans, told reporters: “I don’t believe it will be an explosion, it will be a gradual take-up.”
Pescatore concurred, saying that O2 is “taking a cautious wait and see approach to 5G”.
“It is apparent that initial consumer appetite for 5G will be limited. A greater focus on enterprises is a sensible approach,” he said.
“However, it can’t afford to be left behind,” he added.
“It is apparent that initial consumer appetite for 5G will be limited. A greater focus on enterprises is a sensible approach.”
What O2 said
Evans said: “I’m pleased to report another strong set of full year results including half a million contract net additions and our tenth consecutive quarter of mobile service revenue growth, as we delivered another year of growth in revenues and profitability.
“In 2018, we focused on delivering against our mobile-first, customer-led strategy, launching stand-out propositions, winning landmark business accounts and investing over £1bn for our customers.
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“We also continue to work hard to pave the way for 5G. Our work through our FTSE 100 trials will now be expanded to our Wayra accelerator hubs, to encompass start-ups and scale-ups.
“We are excited to work with UK companies, big and small, to build the 5G economy. This is critically important as mobile is one of the UK’s most powerful opportunities to strengthen our economy and improve the lives of British people.”