O2 announces rise in profits

Mobile phone company 02 has announced a rise in profits and an increase in its customer base.

The firm reported an increase of 12% in group turnover, rising to £3.6 billion, while pre-tax profits also increased by 15%, rising to £975 million.

Customer numbers also rose by 17%, increasing to 25.7 million.

Sir David Arculus, Chairman of O2, described the figures as a “good performance”. He said: “Over the last year, group cash flow has strengthened and underlying earnings have increased by 21%. The Board is pleased to confirm that we will pay an interim dividend of 1.54 pence on December 2.”

The results follow the recent announcement that O2 had accepted a £17.7 billion takeover offer by Spanish firm Telefonica.

O2 performed well in both the UK and Germany – two of the busiest telecoms markets. In the UK, pre-tax profits increased by 2.9% to £598 million, while the customer base grew by 8.9% to 15.09 million.

In Germany, O2 saw its customer base increase by 34% to 8.95 million, while pre-tax profits rose by 51% to £246 million.

Peter Erskine, Chief Executive of O2, said that the results had been received in spite of “intense competition”. He said: “All our mobile businesses delivered strong, high quality customer growth in the first half. In the UK, our customer plan was successful in both retaining existing customers and acquiring new customers. The recent launch of I-mode, along with the opening of our new call centre in Glasgow, will help us continue to differentiate our brand and service.

“In Germany, we are seeing continued strong growth in a competitive market. We added almost 1 million customers in the first half, 41% ahead of last year, driven by our strong brand, new propositions and tariffs and our Tchibo Mobile joint venture.”

O2 also confirmed that its Airwave unit - which offers communications services – secured contracts with the English Ambulance Trusts and the National Fallback Service, as well as also being selected as the preferred bidder for the nationwide Fire and Rescue Service contract.

(KMcA/SP)