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O2 boosts data, sees ARPU slip over Christmas
As Telefonica sale finally looms...

By Jo Best

Published: Monday 23 January 2006

O2 has turned in its third-quarter key performance indicators - a mixed bag of promising data revenues and sliding ARPU - on the same day as it announced the final go-ahead for its proposed sale to Spanish mobile company Telefonica.

In the UK, O2 added almost 900,000 new users in both contract and post-pay segments, excluding customers gained under the Tesco Mobile brand.

However, each of those new customers is now contributing less to O2's coffers than in previous years. ARPU (average revenue per user) for the third quarter came in at £272, compared to £275 for the corresponding period last year.

O2 is now seeing progress in its non-voice offerings. The operator has managed to make significant headway in the current holy grail of mobile operators: uptake of data services. According to O2, 27 per cent of the company's revenue now comes from data.

Of that, 14 per cent comes from non-SMS sources, with some 40 per cent of O2 users now trying out data services. However, text messaging remains the staple cash-cow for O2's data, with volumes increasing 32 per cent year-on-year.

O2 now has around 27 million subscribers across its operations in Ireland, Germany and the UK.

Peter Erskine, CEO of O2, said in a statement he was "particularly pleased" with the results - O2's best quarter since its divorce from BT some years ago.