O2 stays positive as UK connections rise but revenues fall

O2 says it has emerged from a challenging 2020 relatively unscathed, increasing margins and its customer base but suffering an inevitable fall in revenues due to coronavirus.

There are now 36.2 million connections on the O2 network, a figure which includes customers of O2 as well as subscribes of Mobile Virtual Network Operators (MVNOs) like Giffgaff, Lycamobile, Sky Mobile and Tesco Mobile.

O2 itself has 26.9 million of these connections – a year-on-year rise of 4.6%. Internet of Things (IoT) accounts for 6.5 million of these, with the UK’s rollout of smart metres contributing at an increase of 28.6%. When IoT is taken out of the equation, there was a small decrease of 0.5%.

O2 results

The company says that although underlying profitability remains strong, lockdown measures had an “unavoidable” impact on overall revenues, which fell 4.4% year-on-year to £6 billion. Falls in service revenues and roaming income were partially mitigated by hardware and non-mobile ICT busines growth.

However, CEO Mark Evans says low churn reflected strong brand loyalty and its efforts to keep customers connected during the pandemic. It has doubled the capacity of its voice network, boosted 4G coverage, and provided additional data to NHS workers on the frontline.

Its next major initiative will allow customers on any network to buy technology such as games consoles, headphones, and smartwatches in zero interest monthly instalments without an airtime contract.

“We continue to drive value back to customers, saving them £168million in the past year alone through flexible plans that ensure that they always get the best deal,” he said.

“By focusing on value and flexibility, we have grown our customer base to 36.2 million, achieving industry leading loyalty and customer satisfaction ratings.

“As we move forward in 2021, O2 will continue to create new and exciting propositions for consumers and businesses alike, whilst we provide connectivity to power our NHS, and the nation, through this tough period.”

Last year O2 and Virgin Media agreed to merge their operations in the UK and it is hoped that regulatory approval for the deal will be approved before the end of 2021.

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