The economic downturn has prompted a shift in mobile users' behaviour, with customers using less voice minutes, opting for text messaging instead, mobile network O2 Ireland said today.
The company, which is owned by Telefonica, said the monthly average revenue per user was down from €69.17 to €58.85 for post-pay customers in the final quarter of 2009. Prepay customers also spent less compared to a year ago, with customers paying a monthly average of €26.49 in the quarter, compared to €26.73 in 2008.
Chief financial officer Paul Whelan said trading conditions were challenging and there were limited signs of any underlying improvement in early 2010.
"During the quarter, there has been continued growth in data services, driven by the ongoing substitution by customers of mobile broadband for fixed services, and the popularity of market leading devices such as the iPhone," he said.
Customers were also changing how they used their mobile services, he said, by staying within a bundle allowance or using text messaging instead of voice services.
An increasing number of text messages sent during the final quarter of the year reflected a shift in customer behaviour towards messaging. Some 835 million text messages were sent in the quarter, compared with 738 million in the third quarter of 2009.
A total of more than 3.1 billion texts were sent by O2 customers in 2009. However, 4.6 billion voice minutes were used during the year.
Data revenue was driven by mobile broadband, which now has 133,000 customers in Ireland, with non-SMS services accounting for 11.7 per cent of overall service revenues in the final quarter of the year. The iPhone also continued to be popular throughout the year, outselling other smartphones offered by the operator.
O2 said it added almost 49,000 new post-pay customers to its subscriber base throughout the year, with 15,400 in the final quarter alone, bringing its total for the sector to a new high of 691,765 at the end of 2009. However, the prepay base declined by 18,590 customers in the fourth quarter of the year.
O2 now has a total of 1.7 million customers in Ireland, between its post-pay, prepay and broadband services. This is a marginal decline from the previous year.
Meanwhile, the Telefonica Group said it broadly met market forecasts for full-year profit today, but set itself less demanding targets for 2010 by stripping out extraordinary items which flattered earnings in 2009.
Nevertheless, 2009 results showed Telefonica still able to offset a tough home market in Spain - where one in five is out of work - with healthier business operations in Latin America.
Its shares were up 1.54 per cent to €17.16 by 8.42am, in line with the DJ Stoxx European telecoms sector, recovering from a slump in which fears of a merger with Telecom Italia have weighed.
In a move which drew a mixed reaction, Telefonica set the basis for revenue growth roughly €300 million below the reported 2009 figure.
The company however maintained its earnings per share and dividend per share targets for 2010 at €2.10 and €1.40 respectively, as well as dividend targets to 2012.
Telefonica said 2010 consolidated operating income before depreciation and amortisation (OIBDA) should rise 1-3 per cent, while consolidated revenue should rise 1-4 per cent.
Net profit in 2009 rose 2.4 per cent to €7.78 billion, while OIBDA fell 1.4 per cent and revenue was down 2.1 per cent, with revenues slightly ahead of a Reuters poll consensus, and net profit slightly below.
Home market Spain, which accounts for 30 per cent of group revenues, is in the grip of a recession which most economists predict will only abate painfully and slowly, keeping Telefonica's operations under pressure and sending customers to cheaper rivals.
Additional reporting - Reuters
