O2 boost for customers

THE mobile phone operator O2 plans to cuts its prices for pre-paid customers after a 28% rise in interim earnings.

The company, which is owned by British firm MMO2, reported earnings before interest tax, depreciation and amortisation of goodwill of €147 million for the six months to end September, up from €114m a year earlier.

At a pre-tax level, profits fell from €54m to €43m as a result of higher interest charges paid to the parent company.

The company said it would slash tariffs for pre-paid customers having reduced bill-pay customer prices earlier this year.

Revenues at O2 Ireland were €37m from €340m at the halfway stage in 2002. Chief executive Danuta Gray said the jump in revenues was due to increased use of mobiles its customers and not higher charges.

She said O2 Ireland’s customers used their phones for an average of 192 minutes compared to 114 minutes in Britain.

At the end of September, O2 had 1.27 million customers, up from 1.19m. In the three months to end September, the company added 2,000 new customers, but added that it had benefited from full mobile number portability (FMNP), which allows customers to switch networks without changing numbers.

Average revenue per user (ARPU) increased from €333 to €349 for pre-paid customers, who make up 71% of O2’s subscriber base, while APRU for post-pay subscribers was €1,037, up from €1,105. Ms Gray attributed the rise to the increase in use, which was up from 188 minutes to 192.

Among the cost cuts announced yesterday were reductions for calls from O2 to fixed line numbers and to those on the same mobile network.

It has also extend the off-peak time to 16 hours per day. The overall result of the cuts will be a 13% reduction in peak-time call charges and a 21% cut in off-peak calls to O2 mobile customers and fixed line numbers.

Meanwhile, MM02 recorded its first pre-tax profit since it was split from British Telecom two years ago.

It said that in the half year in made profits of €38m, compared to a loss of nearly €520m a year. It said the turnaround was due to a 13% year-on-year rise in the company’s customer base to 19.2m. MMO2 said total revenues lifted 21% to €3.9 billion.

However, O2 also said it would cut 200 British jobs as part of a previously announced restructuring of its central operations. The move, which is expected to generate annual cost savings of up to €66m, will affect staff at Hammersmith, west London, and O2’s headquarters at Slough.