Report Overview

O2 UK: holding its own in toughening conditions

After a period of significant outperformance, O2’s Q1 results reverted to sector average revenue growth with ARPU down by 3% and all of the growth coming from ‘other’ revenues

Regulation limiting out-of-bundle spending has been a significant drag which will continue to worsen

A more competitive market and a punishing regulatory outlook will make it very challenging to sustain 2018 growth trends as this year progresses

Contents

Service revenue growth reverts to sector average

Outage impacted net adds rather than churn

ARPU-based revenue growth in negative territory

EBITDA growth still solid, in spite of emerging drags

Sector outlook challenging

5G strategy in keeping with positioning and strengths

List of charts/tables

Figure 1. Organic EBITDA and mobile service revenue growth

Figure 2. O2 KPIs

Figure 3. Reported organic mobile service revenue growth

Figure 4. Reported mobile service revenue growth by operator

Figure 5. O2 contract net adds – 2012 (000)

Figure 6. O2 contract churn – 2012

Figure 7. Contract net additions (000s)

Figure 8. O2 shares of contract net adds and contract subscribers

Figure 9. Service revenue growth and ARPU-based service revenue growth

Figure 10. Non-ARPU service revenue (€m)

Figure 11. O2 non-ARPU service revenue growth

Figure 12. Outlook for change in mobile trends in 2019 by operator

Figure 13. Capacity utilisation by operator

Figure 14. Total data capacity by operator (PB)