O2 as integrated telecommunications provider on track for growth

-Customer base (mobile and DSL) increased to 18.7 million in the first half of the year, of which 765,000 are new mobile customers
-Fourth consecutive quarter with positive trend in mobile service revenue (+2.7 percent year-on-year)
-Strong organic second quarter growth in total revenue (+8.2 percent year-on-year) and OIBDA (+6.2 percent)1)
-Integration of HanseNet on track
MUNICH. As integrated telecommunications provider of mobile, DSL and IPTV services, Telefónica O2 Germany achieved a total revenue of 2.3 billion Euros in the first half year of 2010. The company, which now includes DSL and communications provider HanseNet, was able to gain 765,000 new mobile customers between January and June and thus accelerate the growth in customers. By the end of June, Telefónica O2 Germany had a total of 18.7 million customers in mobile and broadband services.
The consolidated operating result (OIBDA) increased in the first half of the year by 23 percent year-on-year to reach 532 million Euros, with organic OIBDA growth standing at 9.5 percent. Mobile service revenue saw a positive development for the fourth consecutive quarter, growing in the most recent quarter to 726 million Euros (+2.7 percent on the same period the previous year). It amounted to 1.4 billion Euros (+1.9 percent) over the six-month period. "This positive result shows that we are on the right track to becoming a leading integrated telecommunications provider in Germany. We are also gaining market share from our competitors", explains René Schuster, CEO of Telefónica O2 Germany. The importance of the German market for the Telefónica group is also reflected by its investments: In the first half of 2010 alone, the group invested 2.6 billion Euros in Germany, of which 1.4 billion were invested for new mobile frequencies and 900 Million Euro for the acquisition of HanseNet. "The integration of O2 and HanseNet is forging ahead and is on plan. By end of August, all of our nearly 1000 O2 shops will be offering Alice products. In the near future, we will be offering our customers the bundle products of Alice DSL and O2 mobile services. Telefónica O2 Germany is now in a strong position in the market and well positioned for new growth opportunities. The integration of HanseNet into O2 will be completed by mid 2011. Our strategic advantage is to stay a more agile organization and to react to the demands quicker", announces Schuster.
Q2 2010 PDFr219931
Growth through mobile data services Telefónica O2 Germany continued to benefit from the trend towards mobile data services and Internet-ready smart phones during the first half of the year. "When it comes to mobile laptop surfing with surf sticks, we are one of the two market leaders, thanks to our outstanding data network - every third customer comes to us", explains André Krause, CFO of Telefónica O2 Germany. The company also holds a strong position in the area of mobile Internet on smart phones and other devices. "In May, we launched our rates for the iPad and we've been extraordinarily successful here", says Krause. 765,000 new customers in mobile services Thanks to simple and transparent offers such as O2 o, new iPad tariffs and a successful partner business, the company was able to continue the high customer growth seen at the start of the year through the second quarter, gaining 407,000 new customers. Overall the number of mobile phone customers increased in the first half of the year by 765,000 to 16.3 million. This figure comprises 8.3 million pre-paid and 7.9 million post-paid contracts. With the new cooperation partners Kabel BW, NetzClub, Lidl and Real, it was possible to further expand both the partner business and the sales channels for O2 mobile products. Average monthly revenue per customer (ARPU) remained stable between the first and second quarter of the year at 14.8 Euros (-6.2 percent on the first half of 2009). The ARPU for pre-paid customers developed positively, increasing to 5.8 Euros in the first half of the year (+7.2 percent year-on-year) and reaching 6.0 Euros in the second quarter (+10 percent year-on-year). "We are seeing a positive trend: The ARPU for voice services is stabilising and data turnover per customer is increasing", explains Krause. Stable DSL business The number of DSL customers with the brands Alice and O2 remained constant at 2.4 million in the second quarter compared to the first three months of the year. Positive stimulus will be provided here by joint sales through the O2 shop network as well as new combined products in mobile services and DSL. In the DSL wholesale business with partner firms, the number of debundled broadband connections stood at 1.1 million - this corresponds to an organic growth of 8.2 percent year-on-year.2)
1) Without HanseNet 2) With the integration of previously external HanseNet connections the reported drop in wholesale ULL was -15.8 percent year-on-year. Telefónica O2 Germany GmbH & Co. OHG belongs to Telefónica Europe and is part of the Spanish telecommunication group Telefónica S.A. The Company offers its German private and business customers postpaid and prepaid mobile telecom products as well as innovative mobile data services based on the GPRS and UMTS technologies. In addition, the integrated communications provider also offers DSL fixed network telephony and high-speed internet. Telefónica Europe has about 55 million mobile and fixed network customers in Great Britain, Ireland, the Czech Republic, Slovakia and Germany. About HanseNet: HanseNet Telekommunikation GmbH was founded in Hamburg in 1995. It operates a highly modern communications network for more than 2 million residential and business customers and offers mobile telephony and fixed network as well as broadband and Internet services from a single source. HanseNet is 100% owned by Telefónica o2 Germany. Alice is continuing to expand service to even more areas.