O2 UK has maintained its position as the UK’s largest mobile operator thanks to strong sales of the Apple iPhone, which topped 1 million by the end of 2008. In Q4 the operator added 499,000 fixed and mobile customers and ended 2008 with a total customer base approaching 22 million (including Tesco Mobile), which represented growth of 7.5 percent year-on-year. In addition, O2 said it had managed to outperform the wider UK market by reporting 10 percent growth in both revenues and operating income (OIBDA). Net mobile additions for the year stood at 1.1 million (up 45.3 percent year-on-year), which meant the operator ended the year with a total mobile base of 19.5 million. Just under 400,000 mobile customers were added in Q4. The operator attributed the performance to what it claimed were its lowest ever churn levels, its SIM-only ‘Simplicity’ tariff, and the success of high-end devices such as the iPhone and BlackBerry. 

The UK performance helped Telefonica Europe’s total customer base rise 9 percent to 46 million by the end of 2008 (mobile accounting for 41.2 million) and meet its financial targets for revenues and OIBDA. The company added that Telefonica O2 Germany had “turned its fortunes around” reporting service revenue growth and OIBDA margins that were on a par with the UK in Q4. Meanwhile, parent company Telefonica has reported a 2.7 percent rise in full-year sales to EUR57.95 billion, with strong growth at its Latin America operations making up for sluggish growth elsewhere. Net income rose to EUR2 billion from EUR1.06 billion a year earlier, beating most analysts’ expectations.