O2 keeps the country connected and prepares to power Britain's recovery

Mark Evans, O2 CEO, commented on the network’s support to the UK during the global pandemic:

‘In the last few weeks, Britain has faced a national crisis on a scale not seen in this country since World War II, with the devastating loss of many thousands of lives. Overcoming that crisis takes a united effort, and in the absence of face to face interaction, the country has welcomed connectivity more than ever. We know that people are relying on our network, and it’s a responsibility we take extremely seriously.

‘As the UK’s Number One mobile operator, we have always played a key role in keeping the UK’s customers, businesses and public services connected. Today is no different. Every day, I am humbled by the dedication of O2 key workers keeping the country talking. We have doubled our network capacity, donated directly to those who need it and continued to drive the productivity of the UK’s businesses, helping them to provide an economic lifeline.

‘We will continue to use our position to support the nation, working around the clock to deliver the best network for the UK at this challenging time. By staying connected, we stay strong. My message to Britain is this: stay connected – for our economy, for our communities, for our family and loved ones. Mobile has the potential to ensure Britain keeps moving and thrives again, and we are proud to take on that responsibility.’

Keeping the country connected

DOUBLING NETWORK CAPACITY TO KEEP THE UK CONNECTED

Since the 17th March, O2’s network has been carrying up to 60 per cent additional voice traffic at the busiest point of the day. At its peak, the increase was comparable to six years of regular year on year growth. The company doubled the capacity of its voice network to accommodate this increase and continues to actively monitor the network to maintain voice and data connectivity for all customers. Temporary mobile phone masts have been installed in the grounds the NHS Nightingale hospitals at The ExCeL Centre in London and The Harrogate Convention Centre in Yorkshire. Other Nightingale hospitals will be provided with additional connectivity in the coming weeks.

SUPPORTING THOSE WHO NEED IT MOST

 Supporting the NHS: O2 has a long-standing relationship with the NHS and continues to provide their connectivity – including at the new Nightingale sites. Thousands of connected devices have been provided to clinicians across the UK, allowing doctors to see patients remotely, and allowing relatives of those with COVID-19 to see them in hospital. O2 has offered additional mobile data, voice calls and texts to all NHS frontline staff who are existing customers at no extra cost on personal mobiles used for work purposes. The company also removed charges for customers calling loved ones using Hospedia bedside telephones, used by patients in over 130 NHS hospitals. O2 also handed over the keys to iconic venue, The O2 which is now in use, free of charge, as an NHS training facility for Nightingale staff.

Supporting Customers: Earlier this month O2 lifted the cap on voice minutes to provide unlimited domestic calls for all pay monthly consumers. This followed O2’s move to ‘zero-rate’ access to over 20 websites (including NHS websites) to allow customers to use a range of financial, health, emotional support and advice sites for free. For Business customers, O2 is running flexible working webinars for hundreds of businesses to help keep them running and productive.

Supporting communities: O2 was a major supporting donor of the BBC’s Big Night in fund, supporting charities across the UK. With schools closed and children spending more time at home online, O2 is supporting the government on their pledge to keep families connected, and is working with its charity partner, NSPCC, to offer regular top tips, advice and interactive tools to help parents keep their kids safe online.

 DRIVING BRITAIN’S PRODUCTIVITY:

Helping to sustain UK businesses: O2 continues to ensure that network capacity is optimal for business and corporate customers, ensuring productivity levels remain high and efficiencies are found. O2 is working directly with these customers to help them navigate new ways of working and has been running flexible working webinars for hundreds of businesses to help drive productivity and find new ways of remote working.

Supporting the government: O2 is in touch with the UK government each day, helping them to deliver vital messages to key people, prioritise network capacity and keep the economy moving. O2 is also working at the frontier of technology with the government to help them use mobile data and technology to directly manage the pandemic.

UNDERPINNED BY ADDED SUPPORT FOR O2 EMPLOYEES:

Supporting employees: Working with Capita, O2’s customer service outsourcing partner, O2 has developed technology to enable over 1,000 customer service colleagues to work from home to manage calls from customers.  All O2 high street stores were closed on 23 March to protect employees and customers. No Telefonica UK staff have been furloughed and all remain on full pay.

Q1 2020 Financial Information

All financials reported using IFRS 16 reporting standards with year-on-year movements on a like-for-like basis

Relevance: Total connections, including customers who use the O2 network through giffgaff, Tesco Mobile, Sky Mobile and Lycamobile, reached 34.8 million at 31 January, (+6.3 per cent year-on-year), with Telefónica UK remaining the number one UK mobile network carrier. The company maintained its market-leading position for customer loyalty with contract churn at 1.0 per cent in the quarter and the highest customer satisfaction based on NPS.

Revenues: Total revenue for the quarter reached £1,498m (+1.5 per cent year-on-year).  The revenue increase was mainly due to higher value handset revenues and continued growth in SMIP and MVNO revenues.

Returns: OIBDA for the quarter reached £444m (+1.1 per cent year-on-year) with OIBDA margin at 29.7 per cent.

CapEx for the quarter was £190 million (+17.8 per cent year-on-year) reflecting continued investment in network capacity at a time when customers need it most.

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