O2: Coronavirus causes 'unavoidable' revenue drop

(Image credit: Future)

Improved sales of handsets helped O2 overcome the worst effects of coronavirus and allowed it to post only a minor decrease in overall revenues for the first half of 2020.

The operator said a 1.1% drop in income to £2.945 billion was “unavoidable” given the challenges imposed by the pandemic. Roaming and business revenues have been noticeable casualties as customers spend more time at home and less time on the O2 network.

Quarterly revenues illustrate this point even further. During the period between April and June, overall revenues fell even further to 3.8%.

O2 results 

However these declines were partially offset by an increase in handset revenues, which have increased by 9% since the start of the year.

There are now 34.5 million users on the O2 network, a figure which includes customers of wholesale partners Sky, Tesco Mobile and Lycamobile. O2 has 25.4 million connections, of which 5.58 million are IoT.

O2 CEO Mark Evans said the priority during coronavirus was to maintain the resiliency of its network and provide additional support to customers.

Now with lockdown measures being relaxed, the focus has shifted to ensuring O2 can support the UK’s post-pandemic economy. As previously announced In June, 4G coverage is being improved in 91,000 postcodes and 400 tourist destinations likely to experience larger than usual numbers of visitors due to foreign travel restrictions.

O2 will also continue the rollout of its 5G network, which is now available in 60 towns and cites, and its LTE-M network which now comprises 10,000 sites.

“We’re focused on playing an even bigger role in getting the UK back on its feet,” said Evans. “During the pandemic we have doubled our network capacity to meet demand, improved coverage across rural locations and supported our NHS with training venues and devices.

“We’re acting as a force for good – setting a higher bar for connectivity, service and support for all our customers – and today we’re going further, announcing permanent free access to support websites including the NHS and Samaritans and new virtual 121 appointments with our Gurus. We’re also investing in digital skills training for thousands of our retail colleagues.

“Connectivity has never been more important, and we know that O2 is at the forefront of one of the UK’s most valued services. We will power this country into recovery and work to rebuild Britain.”

In May, parent company Telefonica agreed a deal with Liberty Global to merge O2 and Virgin Media into a single UK communications giant capable of offering converged services that combine fixed and mobile connectivity. The £31 billion deal is expected to close in the middle of next year.

Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.