Customers

Our 28 million customers are the focal point of everything we do

Number of customers by market:

Total number of customers: - 28.1 million
O2 UK – 16.3 million (up 13.6 per cent on 2004/05)
O2 Germany - 10.1 million (up 26.6 per cent on 2004/05)
O2 Ireland - 1.59 million (up 3.9 per cent on 2004/05)
Manx Telecom – 67,100

Financial highlights (for the 10 months ended 31 January 2006)

Group turnover - £6,124 m
EBITDA - £1,589 m ¹ 
Capital expenditure - £1,200 m
Total equity - £10,168 m

Dividends

Two dividends were paid in the 10 months ended 31 January 2006.  The Company paid an inaugural final dividend of 2.25 pence per share in respect of the financial year ended 31 March 2005 in August 2005 and an interim dividend of 1.54 pence per share in December 2005.

The customer experience

We aim to provide memorable customer experiences. We do this by trying to fully understand and anticipate customer needs – and by using our research and systems to identify and recognise the differences between the types of customers we serve.

We believe we need to provide innovative and well-priced products and services, understand customers’ mobile usage, and respect people’s wishes. We also want to reassure them that our services are safe and appropriate across diverse groups – differing by age, geography, income, and social and special needs.  

The key challenge in the mobile marketplace remains to deal with churn, the number of customers who regularly switch from one provider to another. During 2005/06, we improved our customer service offer in all our markets, in terms of employee numbers and operational efficiency.

Developing new applications

The mobile phone is used for voice and text messages and increasingly also to handle sophisticated data information, such as video downloads and news feeds. More than ten million customers in the UK, Germany and Ireland use data services regularly; including i-mode® ² mobile internet services, downloads, picture messaging, games and other second generation, or so-called GPRS services, offered through our O2 portals.

During the year there was also real growth in the number of corporate mobile phone contracts, and a switch in this market towards more sophisticated mobile email and data services. Examples of new customers using advanced mobile media, the O2 Xda II handheld computer, in business and the public services include:

• Balfour Beatty – to give busy auditors data and photographic services on site.
• Wolseley UK – to provide a tailored sourcing service for wholesale customers.
• Barnet Council’s Children and Family Service – to enable social workers to spend more time with affected families and children and less time in the office.
• Xpert Digi Taxis (Ireland) – to provide a visual track of the location of each taxi at all times.

New O2 UK-commissioned research from the centre for economic and business research (cebr) reveals that businesses invested £61.0 billion in business communications in 2004 and that 62 per cent of the UK workforce now consider mobile services essential to do their jobs effectively.

Research published by Ofcom in July 2005 revealed the scale of mobile’s popularity in the UK. Between 2000 and 2004, the total number of minutes spent making mobile calls in the UK almost doubled, from 34.0 billion to 62.0 billion. During the same period the number of mobile phone subscribers increased by 50 per cent to 61.1 million.

¹ EBITDA is our earnings before interest, tax depreciation, amortization and exceptional items, excluding our share of the operating profits and losses of our joint ventures and associates.

² i-mode and the i-mode logo are trade marks or registered trade marks of NTT DoCoMo Inc. in Japan and other countries. i-mode is the world’s most widely used mobile Internet service, with 44 million users in Japan and 3 million users in Europe, across nine network operators including France, Spain, Greece, Germany and Belgium.