Telefónica UK Limited (O2) the UK’s largest network hits 35.4 million customer accesses, and today announces Q3 results for the three month period ended 30 September 2020.
Highlights
- UK’s No.1 network continues to grow, hitting a record 35.4 million connections, the most of any network and an increase of 3.8 per cent year-on-year
- O2 maintains the industry’s leading customer loyalty with churn down to 0.9 per cent
- New business wins including McDonalds agreement to upgrade connectivity at 800 restaurants nationwide
- O2 is working to rebuild Britain with connectivity, and today launches a national plan to connect society’s most vulnerable, offering 10,000 connected mobile devices to those in lockdown areas
Mark Evans, CEO Telefónica UK said:
“As the UK’s No.1 Network, it’s our responsibility to be there for our customers, providing fantastic connectivity, the best value and the industry’s leading customer service. This has especially been true during the pandemic when our customers have needed us more than ever. It is therefore pleasing to see us sustain market-leading loyalty and the highest net promoter score in the sector, as more and more customers choose O2.
“Investment in connectivity has never been more important. At O2 we’re playing our part in future-proofing our nation, planning and building technology for the long term, demonstrated by our continued deployment of 5G and extending coverage even further. We’re also getting devices to those most in need, to ensure that connectivity benefits everyone. Now it’s vital we pull together and continue to invest, to put Britain on the front foot.”
O2 rolls out national plan to connect society’s most vulnerable
O2 has announced today a huge mobile device donation scheme to support vulnerable people who are digitally disconnected from others. The UK’s largest mobile network is partnering with charity Hubbub with the ambition to donate 10,000 devices complete with free minutes and data across the UK in cities including London, Bristol, Glasgow, Leeds, Manchester and Swansea, with many phones arriving in time for Christmas. Customers can join the drive by donating their old devices. The news comes at a vital time as government coronavirus restrictions lead to a reduction in social contact, and the tech divide widens again.
O2 creates Green Savings Calculator to help UK businesses save up to £53bn
As the only UK network committed to reaching net zero by 2025, alongside Telefonica Group, O2 has demonstrated that UK businesses could benefit from millions of pounds in new savings and dramatically reduce their carbon footprint through a new Green Savings Calculator created with the Carbon Trust. In trials, the calculator found an average potential annual saving of £2.6m for a company of 1,000 employees*. Overall, O2 calculated that it could provide a £53bn** annual saving for companies in the UK, at a time when employers are working hard to support UK workers through the COVID-19 pandemic.
Q3 2020 operational highlights
Putting customers first
O2 launched a national prime time advertising campaign and brand platform in the quarter, demonstrating that O2 is there for customers whenever needed while celebrating the importance of connectivity. The embodiment of the O2 brand, ‘Bubl’, takes the form of a loyal and reliable blue robot helping to ensure customers have the best possible service, experiences and interactions with O2, showcasing the many ways that it makes customers feel special.
The company also launched a compelling set of Pay & Go tariffs offering customers up to five times the data for the same price. The options include two brand-new International Bundles so that customers can continue to keep in contact with their loved ones from around the world.
Priority saved customers over £6.7 million in the quarter with over 1.9 million Priority offers accepted and over 2.5 million entries made to prize draws. With a focus on things that customers could enjoy during pandemic restrictions, offers included up to 12-months free access to Disney+ and Amazon Prime video, free drinks from Caffè Nero and discounted ‘kick off fitness bundles’ from The Protein Works™.
Helping UK businesses
O2 remains the UK’s No.1 for business customer satisfaction and has introduced a suite of innovative digital services for businesses in the quarter to help the nation get back to work safely during the pandemic. The new services include handheld thermal imaging scanners and thermal imaging tablets with in-built contactless visitor management that enable fast, secure and safe access into and around workplaces as well as public places such as pubs, restaurants and gyms. The company also launched new flexible tariffs for small businesses at a time when needed most. Features include:
Automatic data rollover. Any unused data is automatically rolled over to the following month.
Flexibility. Ability to change data allowance each month to cater for changing needs.
Flexible add-on business apps. Such as Microsoft Office 365, McAfee and Sophos.
Range of contract lengths. From a rolling 30-day plan, through to 36 months.
Investing in connectivity
O2 continued to invest in strengthening its 4G network while continuing to roll out 5G. O2’s customers can now benefit from 5G at over 100 locations across the UK, reaching parts of all of the UK’s major towns and cities. New locations include Milton Keynes, Ipswich and Chelmsford.
In the quarter, O2 announced the launch of the first commercial laboratory for 5G and satellite communications in the UK as part of Project Darwin, a four-year trial programme supported by O2 and the European Space Agency. The laboratory is now open to companies looking to test proofs of concept for connected and autonomous vehicles (CAVs) using both 5G and satellite communications.
In another initiative as part of Project Darwin, in collaboration with the University of Glasgow and the European Space Agency, O2 has been working with the NHS to deliver a pilot trial of a fully-connected, 5G-powered clinic-on-wheels, in order to track COVID-19 at six care homes in Glasgow. O2 has also agreed new business wins with other UK businesses, including a McDonalds agreement to upgrade connectivity at nearly 1,000 restaurants nationwide.
Responsible Business Blueprint
O2 published the third edition of its responsible business plan in the quarter, originally launched in 2012. The Blueprint sets out O2’s continued commitment to be one of the UK’s leading responsible businesses. These commitments include O2’s Greener Network ambitions, supported by O2’s partner the Carbon Trust with the goal to become a net zero business by 2025, while working with supply chain partners aiming to reduce carbon emissions by 30% in the next five years.
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Q3 2020 Financial Information
Relevance: Total accesses, including customers who use the O2 network through giffgaff, Tesco Mobile, Sky Mobile and Lycamobile, grew 1.3 million to 35.4 million at 30 September (+3.8 per cent year-on-year), including growth in all segments with Telefónica UK remaining the largest UK mobile network carrier. Included in the above are contract net additions of 33,000 and prepay net additions of 557,000 in the quarter. The company also maintained its market-leading position for customer loyalty with contract churn at 0.9 per cent in the quarter.
Revenues: Total Revenue in the quarter reached £1,445 million (-9.5 per cent year-on-year) with the reduction mainly driven by reduced roaming revenues and other COVID impacts, and handset release phasing.
Returns: OIBDA in the quarter reached £467 million (-4.5 per cent year-on-year). OIBDA margin in the quarter was 32.4 per cent. CapEx for the 9 months to 30 September was £540 million reflecting continued investment in areas of growth such as 5G.
– ENDS –
Notes to Editors
No.1 Network: Based on total number of connections to O2 network vs. number of connections to each of Vodafone, BT Group and Three as of 30.06.20. Limitations to network coverage and terms apply. To verify see o2.co.uk/network
About Telefónica UK / O2
O2 is the principal commercial brand of Telefónica UK Limited, part of the global telecommunications group Telefónica S.A, headquartered in Spain and operating in Europe, and North, Central and South America.
O2 is the UK’s largest network with more than 35 million connections, providing 2G, 3G, 4G and 5G services while operating a nationwide O2 Wifi service. The company is the network of choice for mobile virtual network operators giffgaff, Sky Mobile and Lycamobile and manages a 50:50 joint venture with Tesco for Tesco Mobile.
For three consecutive years O2 has won Best Network Coverage provider at the publicly voted USwitch Awards (2018, 2019, 2020). It won Best Network Performance at the Mobile News Awards 2019 and was named Most Reliable Network by GWS in 2020.
O2 has led the industry with its commitment to Customer Fairness. Since 2013 O2 Refresh has split airtime and device costs so customers never pay for a handset they already own, and the evolution of Custom Plans gives customers true flexibility over how they pay for their mobile phone. O2 also offers exclusive Priority Tickets which provide customers with pre-sale tickets for The O2 and O2 Academy venues, 48 hours before everyone else, to England Rugby matches – who O2 have proudly been sponsors of since 1995.
O2 strives to do the right thing both as a business and for its customers. It has committed to becoming net zero by 2025 and to working with supply chain partners to reduce carbon emissions by 30% in the next five years. Last year O2 was one of only three companies globally to be recertified at the highest level by the Carbon Trust Standard for reducing supply chain emissions. Through its partnership with the NSPCC, since 2015 O2 has helped parents take over 7 million actions keep their kids safe online. In 2020 it became the only UK mobile network to sign up to The Conscious Advertising Network (CAN), a voluntary coalition of organisations set up to ensure that industry ethics catches up with the technology of modern advertising.
O2 has 6,500 employees across three main office sites and more than 440 retail stores, and was named a Best Place To Work in Glassdoor’s 2019 Employee’s Choice Awards. Its industry-leading inclusive policies have seen it recognised with a National Inclusion Standard accreditation. In 2019 the company introduced 14 weeks’ paid paternity leave for heterosexual and same-sex couples, and it launched a toolkit for employees considering transitioning at work. It is the only teleco named in the Social Mobility Employer Index for the last three years.
Green Savings Calculator
Calculator savings are representative examples, for businesses in professional activities sector with employees taking an average number of UK business trips of 2 per month, and no international travel, without a fleet of vehicles. Going from zero home working to all employees working two days per week at home.
Business with 100 employees:
- 53 tonnes of CO2 saving per year
- £261,000 saving in energy, travel-related costs and office rationalisation
- 8,520 hours saved on commuting and business travel
*Business with 1000 employees
- 534 tonnes of CO2 saving per year
- £2.6m saving in energy, travel-related costs and office rationalisation
- 85,196 hours saved on commuting and business travel
UK business average
(excluding businesses with fewer than 5 employees and therefore, based on ONS UK Govt. business population estimates 2019, based on an average of 39 employees)
- 21 tonnes of CO2 saving per year
- £102,000 saving in energy, travel-related costs and office rationalisation
- 3,323 hours saved on commuting and business travel
**O2’s calculations are based on UK-wide figure across all sectors and obtained by removing the people that are not able to work remotely or are already mainly working from home. A total of 20.333.894 employees could benefit from homeworking in the UK, taking out employees already mainly working from home and professions that cannot be performed remotely.
Telefónica UK Limited is registered in England and Wales. Registration number: 1743099. Its registered office is at: 260 Bath Road, Slough, Berkshire, SL1 4DX, United Kingdom.
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