O2 gains ground on rival Vodafone

O2 Ireland attracted 91,000 new subscribers in the last quarter of 2004 as the State's second-biggest mobile phone firm gained ground on its rival Vodafone.

The company said yesterday it has 1.516 million subscribers, an increase of 11 per cent on the same period 12 months earlier. In the same quarter, Vodafone added 39,000 customers bringing its total user base to 1.93 million.

The results for the Christmas quarter, which ran for the three months to the end of December, indicate that Vodafone will surrender market share to Meteor and O2 Ireland in the next survey of the Irish mobile phone market.

However, O2 Ireland's latest performance indicators show its customers do not spend quite as much as Vodafone's subscribers, who spend an average of €602 per year on mobile services.

O2 Ireland's customers spend on average €564 per year on mobile services, up from €556 in the same quarter a year earlier.

This average revenue per user (ARPU) figure is a key metric used by the telecoms industry to measure the performance of a company over a 12-month period.

With an ARPU figure of €564, O2 Ireland subscribers would generate revenue worth €855 million per year for the mobile company.

The Irish market is considerable more lucrative for MmO2 - O2 Ireland's parent - than its two other European markets, Britain and Germany. O2's subscribers in Germany spend on average just €370 per year while its British customers spend €408 per year.

Data services account for 20.9 per cent of all service revenue generated by O2 Ireland subscribers and text messaging remains phenomenally popular.

O2 Ireland subscribers sent 343 million text messages in the Christmas quarter, a 14 per cent increase on the same period a year earlier.

O2 Ireland's chief financial officer, Mr Paul Whelan, said the strong Christmas results for the company were driven by competitive tariffs and an exciting range of mobile handsets and devices.

"Our key performance indicators today show that, despite intense competition and a difficult regulatory regime, O2 has again recorded a strong third quarter," he added.

O2 Ireland's performance statement made no mention of the firm's ongoing battle with the Commission for Communications Regulation (ComReg) over a new ruling to force it to offer competitors access to its network.

However, the company has previously warned that the ruling to enable "virtual operators" to enter the market may force it to cut back investment in Ireland.

A spokeswoman for O2 Ireland said yesterday that the firm was on schedule to begin offering third-generation (3G) mobile services within the first half of 2005. These services will enable consumers to send and receive multimedia and video content.

MmO2 will launch 3G mobile services in Britain on February 1st. It will start selling contract 3G phones next month, with pre-pay versions soon afterwards. It will sell phones powered by Japanese i-mode internet technology in the second half of the year.