O2 profits up 2.2pc in first half of the year to £731m

Revenue also increases 2.3 per cent to £2.759 billion, with 178,000 new contract customer additions 

O2’s profits for the first six months of 2017 rose 2.2 per cent year-on-year to £731m.

Reporting its financial results for the first half of this calendar year, the mobile operator revealed this increased 3.9 per cent in the second quarter compared to the same period in 2016.

Total revenue was £2.759 billion, increasing by 2.3 per cent and 2.6 per cent respectively, including mobile service revenue growth of 1.3 per cent and 1.4 per cent.

O2 added 178,000 new contract customers in the first half of the year (72,000 excluding M2M), growing the mobile contract base by 1.9 per cent year-on-year, which now accounts for 62 per cent of its total subscribers.

Churn in this segment (excluding M2M) remained “market leading” at 0.9 per cent.

In prepay, net losses were 274,000 customers, however those with “frequent top-ups” increased by 0.4 per cent from a year earlier. This left the total customer base broadly flat at 25.1 million.

From this figure, 12.6 million customers are using 4G (+16.8 per cent year-on-year) with data growth growing a further 64.6 per cent.

Refresh drive

O2 attributed its Refresh tariff for driving its contract customer growth, with customers on this plan saving an average of £216 per year.

This tariff separates the cost of the handset from that of the airtime and automatically lowers customer bills once the phone plan has been paid off.

Capital expenditure was £373 million – up 15.4 per cent for H1 and 1.7 per cent for Q2 – with its network expanding and 4G coverage now covering over 97 per cent of the UK population outdoors (up seven percentage points year-on-year).

In the B2B market, the mobile operator gained new business from Amey, Tesco Bank, Next, Mercedes Benz, The Home Office, Surrey Police and Sussex Police.

‘Robust performance’

O2 UK CEO Mark Evans said: “Our robust first half performance demonstrates how fiercely we continue to compete, by differentiating in the market as the only true customer led mobile player. We are investing significant sums in our network and our customers are rewarding us with market leading loyalty.

Mobile is the UK’s most powerful opportunity to strengthen our economy. In doing so, we will enrich our society and, ultimately, be able to outperform on the global stage. Mobile moves the UK, and the UK must continue to move mobile. Investment, adoption and prioritisation must match the opportunity for the benefit of all.”