O2 posts revenue decline for H1 due to Covid
Telefónica UK Limited has reported a “slight” revenue decline of 1.1.% with profitability down 1.6% for H1.
Total revenue for the period reached £2,945 million, with the decline attributed to “unavoidable lockdown-related” declines in SMIP installation, roaming services and other service revenues. This was partly mitigated by hardware revenue and non-mobile ICT business growth.
OIBDA also declined by 1.6% to reach £884 million, excluding 2019 one-offs, with the OIBDA margin at 30%.
CapEx for the period was £355 million, “reflecting continued investment in network capacity at a time when customers need it most”. The customer base itself saw growth of 2.5%, and total connections, including customers who use the O2 network through giffgaff, Tesco Mobile, Sky Mobile and Lycamobile, reached 34.1 million at 30 June. The growth supressed year on year customer growth and churn to “just 0.9%”.
Commenting on the results, CEO Mark Evans (pictured), said: “The impact of the Covid-19 pandemic has been devastating for many families, communities and businesses right across the UK. As the UK’s number one mobile network for customers, we have naturally provided additional support to our customers at such a critical time, while continuing to invest in and grow our network, maintaining market-leading levels of customer loyalty and satisfaction.
“Now we’re focused on playing an even bigger role in getting the UK back on its feet. During the pandemic we have doubled our network capacity to meet demand, improved coverage across rural locations and supported our NHS with training venues and devices,” he added.
In its operational highlights, O2 said it had doubled the capacity of its voice network to meet “unprecedented demand”, and has boosted 4G services in more than 91,000 postcodes and almost 400 tourist hotspots.
5G continues at pace in partnership with Nokia and Ericsson and availability pushed to 60 towns and cities to date. Further, following the launch of the first LTW-M network, O2 now has 10,000 LTE-M sites operational in the UK.
On the employee front, O2 said it had not furloughed any of its 6,500 staff during the Covid-19 pandemic. Further, “as part of its efforts to rebuild Britain, the company has also enfranchised its employee base with a new £10 million incentive programme to motivate and reward those working to keep Britain connected”.
Evans continued: “We’re acting as a force for good - setting a higher bar for connectivity, service and support for all our customers - and today we’re going further, announcing permanent free access to support websites including the NHS and Samaritans and new virtual 121 appointments with our Gurus. We’re also investing in digital skills training for thousands of our retail colleagues.
“Connectivity has never been more important, and we know that O2 is at the forefront of one of the UK’s most valued services. We will power this country into recovery and work to rebuild Britain."
There's more on Q2 and H1 financial results in episode 14 of The Digital Digest.