Telefónica O2 Germany on a stable growth path

-Total revenue rises to 1.24 billion Euros in third quarter (+4.7 percent organic growth1) on the same period in the previous year)
-Mobile service revenue grows by 3.6 percent year-on-year
-388 thousand new mobile and DSL customers this quarter
MUNICH. Telefónica O2 Germany has continued to grow steadily in the third quarter of 2010 and increased revenue and results. The company, which includes DSL and communications provider HanseNet as of 16 February 2010, achieved total revenue of 1.24 billion Euros. This corresponds to an organic growth in revenue of 4.7 percent year-on-year1). Mobile service revenue continued its positive trend for the fifth consecutive quarter (+3.6 percent). By the end of the quarter, Telefónica O2 Germany had a total of 19.1 million customers in mobile and broadband services - an increase of 388 thousand in the previous quarter. In regards of customer growth, the company is the fastest growing mobile telecommunication provider in the German market in 2010.
Not accounting for one-off accruals for integrating HanseNet, the consolidated operating result (OIBDA) amounted to 302.9 million Euros (+25 percent). As previously announced, O2 and HanseNet will be integrated into one company by the end of March 2011. "By integrating O2 and HanseNet, we will increase our profitability and also be able to offer our customers new services such as IPTV and bundle products comprising mobile and fixed network services," says René Schuster, CEO of Telefónica O2 Germany. "The positive result achieved in this recent quarter shows that we are on the right track. Building on new top-of-the range products such as the iPhone, Nokia N8 and HTC HD7, we will significantly grow our customer base in the next few months and further close the gap to the two market leaders." By investing in new products and services, Telefónica O2 Germany is positioning itself for further sustainable growth. 2011 will see the company launch its first LTE-based products. This mobile broadband technology is up to five times faster and offers new services such as live video streaming. In its fixed telephony segment, Telefónica O2 Germany sells VDSL-based accesses under its Alice brand, which offers data transfer speeds of up to 50 megabits per second. "In both our mobile and fixed telephony business, we therefore offer our customers tomorrow's technology today," Schuster explains. Another innovative service launched by the company is Global Friends, which was developed in conjunction with specialist IP communications platform provider Jajah. As a result, customers can now call friends and acquaintances abroad at cheap local rates. "Global Friends is the first mass-market VoIP service available to mobile customers, and shows a very positive development," Schuster explains.
Customer growth with O2 and Alice brands "In this quarter, we were able to achieve significant customer base gains both with the core brand O2 and the Alice brand", explains André Krause, CFO of Telefónica O2 Germany. The quarter saw a jump in mobile customers of 356 thousand to 16.6 million (+ eight percent year-on-year). Of these, eight million were post-paid and 8.6 million pre-paid customers. Positive developments were equally recorded for Fonic, the company's own discount brand, as well for business with cooperation partners Tchibo, Lidl, Schlecker, Real, Kabel Deutschland and Kabel BW. The third quarter saw the number of DSL customers rise by 32 thousand to 2.4 million, with both the O2 and Alice brands registering new customers.
Results Q3 2010
In DSL wholesale business with partner firms, the number of debundled broadband connections stood at 1.1 million - this corresponds to an organic growth of ten percent year-on-year2). By the end of the quarter, IPTV services accounted for 68 thousand customers (+17 percent on the previous quarter). Average revenue per user (ARPU) remained stable compared with the previous two quarters at 15.0 Euros (-4.6 percent compared with the same quarter last year). The ARPU for pre-paid customers developed positively, increasing to 6.18 Euros (+3.9 percent year-on-year), as did average data turnover per customer (4.9 Euros; +5.4 percent). "An increasing number of customers are using premium smartphones and tablet PCs in combination with fast data connections and are willing to pay more for such services," comments Krause.
1) Not accounting for HanseNet 2) With the integration of previously external HanseNet connections the reported drop in wholesale ULL was -15.2 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.