O2 Reaches 10m 4G Users But Brexit Hampers IPO Plans
O2 is still looking at floating on the stock exchange but won’t commit to a timeline post-Brexit vote
O2 now has 10 million 4G customers and is confident about the future of its mobile-only business in the UK, but CEO Mark Evans has hinted plans for floatation are slightly less advanced following Brexit.
According to parent company Telefonica’s third quarter results, O2 now has 25.4 million mobile customers (3G and 4G, pay as you go and post-paid) and its LTE network has achieved 93 percent outdoor coverage.
Data traffic has risen by two thirds in the past year and revenues are flat at €1.7 billion (£1.5bn).
O2 IPO
The future of Telefonica in the UK had been in doubt following the European Commission (EC)’s decision to block the proposed £10.25 billion merger between O2 and Three.
Prior to the decision, Telefonica (and Three’s parent Hutchison) had argued there was little hope for mobile-only operators in a quad-play world and had little desire to get involved in the battle for landline, broadband and television customers.
However strong financial performance and low customer churn during the negotiations has led Telefonica to reconsider, and the O2 network will also host the Sky Mobile mobile virtual network operator (MVNO) when it goes live later this year.
A management buy-out by former CEO Ronan Dunne never materialised and Evans, former CFO, was promoted thanks to his financial achievements. An IPO had been touted, but Evans says it will only happen when the time is right.
“We are not committing to a timeline,” The Guardian quotes Evans as telling analysts. “We just need to be ready if the market conditions are right. There will be a judgment at that stage. Be ready, be prepared. It is one of many options the group will look at in terms of its indebtedness.
“We’ll decide in 2017 if it’s right to move ahead with an IPO. Market conditions will undoubtedly have a part to play. It won’t be the only assessment.”
A recent study by RootMetrics ranked O2 as the worst network in the UK, although O2 has consistently questioned the independent research firm’s findings.
O2 CTO Brandon O’Reilly told TechWeekEurope earlier this year that O2 would make the most of its good reputation for customer service and continue a network upgrade plan that had been devised independently of the proposed Three merger.
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