TELEFÓNICA IRELAND, which operates the O2 brand in Ireland, saw smartphone sales almost double in the fourth quarter of 2011. This jump drove a two-fold increase in mobile internet traffic on the O2 network in that period.
Over 2011, data revenues increased 6 per cent on the back of strong growth in non-SMS data revenues. However in the fourth quarter, total service revenue dipped to €157 million, down from €168 million in the previous quarter. The company attributed this revenue decline to changes in customer behaviour as people responded to the difficult economic environment.
The monthly average revenue per unit shrank to €31.33 in the last quarter, from €32.46 in the previous quarter.
Paul Whelan, chief financial officer of Telefónica Ireland, said the trading environment remained very difficult in the fourth quarter, with customers seeking to “optimise” their monthly spend and take advantage of value for money services and products. “Nonetheless, we are seeing a continued increase in the popularity of Smartphones and data services,” he said.
The doubling of smartphone sales and mobile internet traffic in quarter four boosted O2’s post-pay customer base, with some 6,000 new customers gained over the three months, and 23,000 over the full year.
However, the network’s total customer base, which includes mobile and fixed, slipped to 1.647 million at the end of December, from 1.68 million in quarter three.
Its foray into financial services has enjoyed success, with more than 100,000 customers purchasing a prepaid O2 Money Card since it was launched last February.
The parent Telefonica group predicted yesterday its profit margin would continue to drop this year after 2011 earnings slumped because of weakening demand amid the European debt crisis.
Profitability based on operating income before depreciation and amortisation, or Oibda, fell to 32.2 per cent in 2011 from 42.4 per cent, Madrid-based Telefonica said yesterday. The decline will continue this year, although at a slower rate, the company said.
Telefonica's full-year sales rose 3.5 per cent to €62.8 billion, in line with analyst estimates. Sales will grow more than 1 per cent this year, the company said. ( Additional reporting Bloomberg)
