Quarterly results: Customer growth strengthens O₂ Telefónica's operating performance in the first quarter 2025

• Telecommunications provider grows faster than in the same period last year with an increase of 164,000 new mobile contract customers

• High network roll-out performance and best ever measured service quality for O₂ deliver further improved service performance for consumers and businesses

• Revenues in a highly competitive market influenced by cyclical declines in hardware, planned customer migration and promotions

Telecommunications provider O₂ Telefónica has made a robust start to the 2025 financial year. In a first quarter characterized by intense competition, the company gained 164,000 new mobile contract customers. Net growth in customer accesses was another 4.5 percent higher than in the same quarter of the previous year. At minus 2%, revenues were slightly down versus the previous year with a stable EBITDA margin overall, influenced by declines in the hardware business and mobile service revenues. The latter declined as expected (-1.9%) and reflects the planned effect of the customer migration in national roaming with a major network partner. Excluding this temporary effect, mobile service revenue showed a positive development.

Against the backdrop of continued intense competition, there is strong momentum on the customer side. In the first quarter of 2025, the company gained 164,000 new contract customers and is therefore expected to grow faster than the market. Average revenue per user (ARPU) for the O₂ brand remained almost stable year-on-year. Business with machine-to-machine communication (M2M) developed dynamically: growth in M2M connections amounted to 150,000, more than doubling compared to the same period of the previous year (+132.4%). The strong growth is due in particular to the dynamic development in the energy market, in which O₂ Telefónica has established itself as the leading provider for the communication of smart meter gateways. Total revenues amounted to EUR 2.056 billion and were therefore 2.0% below the previous year's figure. Mobile services revenues amounted to 1.392 billion euros. The fixed-line business continued to grow, with revenues increasing by 2.2% year-on-year to EUR 215 million. This development was driven by more profitable customer relationships with a trend towards higher-value connections. The hardware business recorded revenues of EUR 443 million (- 4.6% compared to the previous year) and thus developed more robustly than the overall market (- 4.9% according to GfK newron) on the back of consumer restraint and longer replacement cycles. Earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for exceptional effects, amounted to 629 million euros, 2.2% below the previous year's figure. The EBITDA margin remained stable at 30.6% - a sign of the resilience of the business model, despite intense price competition and temporary burdens. Capital expenditure (CapEx) amounted to EUR 203 million in the first quarter, reflecting the continued focus on network expansion and network performance.

After 15 successful months in the three-year strategy program, the focus in 2025 continues to be on specifically strengthening the resilience of the business model. Growth will be driven by the private customer segment as well as the segments with business customers and partners - including a new framework agreement with a major federal authority and the cooperation with the technology company Siemens to develop innovative 5G connectivity solutions for industry. The consistently high level of service underlines the positioning in the private customer segment. In the connect Hotline Test 2025, O₂ customer service came second and achieved its highest rating to date with 459 out of a possible 500 points. The overall rating of “very good” was confirmed once again. With the upcoming change of government and the signed coalition agreement, politicians are also setting digital priorities for the future. “In a complex geopolitical world situation, Germany and Europe are called upon to secure their digital ability to act. This includes investing in high-performance infrastructures, a modern administrative architecture and the consistent strengthening of digital sovereignty,” emphasizes CEO Markus Haas. “Digital policy is social policy. The planned classification of fiber optic and mobile network expansion as an overriding public interest is a promising step in this direction.”