O2 increases revenue and operating result

(PresseBox) (Munich, ) .
- With the integration of HanseNet, the total number of mobile and DSL customers reaches 18.3 million in the first quarter
- Consolidated quarterly revenue reaches more than one billion Euros for the first time
- Strong organic growth(1) in revenue (+8.8% year on year), OIBDA (+13%) and mobile service revenue (+2.4%)

Telefónica O2 Germany has significantly increased its revenue and results in the first quarter of 2010. From January to March, the company, which acquired DSL and communications provider HanseNet on 16 February 2010, generated total revenue of 1.074 billion Euros(2). Compared to the same period in the previous year, the operating result (OIBDA) went up by 19% to 241 million Euros, mobile services revenue increased by 1% to 702 million Euros(2). In this quarter, 357,000 new mobile customers were added. Overall, the company had 18.3 million mobile and DSL customer across Germany as of 31 March(2).

This success was based on strong organic growth. Without the integration of HanseNet, revenue in the first quarter grew by 8.8% compared to the same period in the previous year. OIBDA increased organically by 13%, mobile services revenue by 2.4%(1).

"The excellent result in the first quarter shows that Telefónica O2 Germany is on the right track: We continue to gain market share and at the same time we are improving our profitability", says René Schuster, CEO of Telefónica O2 Germany.

"We will continue this development with the integration of HanseNet. Our O2 shops are already successfully selling Alice products and we are collaborating in customer services", adds Schuster. "Our company will have a new set up: With a new organizational structure until 2012 we want to react agile and quick to customer wishes."

Lutz Schüler, CEO of HanseNet, explains: "The integration of HanseNet and Telefónica O2 Germany is proceeding swiftly and successfully. The bundling of our strengths in shop and online sales speeds up our growth and allows us to tap into new groups of buyers."

Growth through a futureproof network

Telefónica O2 Germany continues to benefit from the trend towards mobile data services and smartphones for mobile internet. "Our strategy, to build up our own state of the art network now pays off", says André Krause, CFO of Telefónica O2 Germany. "We benefit disproportionately from the boom of the mobile internet and we are well prepared for growing data traffic." Following investments of around four billion Euros, O2 today has one of Europe's most modern mobile phone networks. Averagely, every third new surfstick runs on the O2 network. As much as one seventh of the company's mobile services revenue is already generated through data services (without SMS).(3)

Simple and transparent rates

Simple and transparent offers such as O2 o, the tariff with no monthly base fee and no minimum contract period, as well as the new business customer rate O2 on, made the company achieve strong customer growth in the first quarter. This was also made possible thanks to successful partnerships with Tchibo, Schlecker, M-Net, Kabel Deutschland and the company's own discount brand, Fonic. At the end of March, Telefónica O2 Germany had 15.9 million mobile customers. This figure includes eight million prepaid and 7.9 million postpaid customers. Through the integration of HanseNet, the number of DSL customers rose to 2.4 million, of which 301,000 were O2 DSL customers (+30% compared to the same quarter in the previous year). In the DSL wholesale business with partner companies the number of unbundled broadband accesses amounted to one million (+12%).

ARPU (average revenue per user) was 14.8 Euros - minus 6.6% compared to the same period in the previous year(3). Positive was the development of data revenues through mobile internet and surfsticks: The nonsmsdata ARPU increased by 31% to 2.1 Euros(3)."We are going to continue to expand our data business through new hardware products and tariffs", says Krause.

About HanseNet: HanseNet Telekommunikation GmbH was founded in Hamburg in 1995. It operates a highly modern communications network for more than 2 million residential and business customers and offers mobile telephony and fixed network as well as broadband and Internet services from a single source. HanseNet is 100% owned by Telefónica o2 Germany. Alice is continuing to expand service to even more areas.

(1) Organic growth without HanseNet
(2) Consolidated results for Q1 2010 including HanseNet for the period 16/2 - 31/3/2010
(3) Without HanseNet

Telefónica Germany GmbH & Co. OHG

Telefónica O2 Germany GmbH & Co. OHG belongs to Telefónica Europe and is part of the Spanish telecommunication group Telefónica S.A. The Company offers its German private and business customers postpaid and prepaid mobile telecom products as well as innovative mobile data services based on the GPRS and UMTS technologies. In addition, the integrated communications provider also offers DSL fixed network telephony and highspeed internet. Telefónica Europe has 54 million mobile and fixed network customers in Great Britain, Ireland, the Czech Republic, Slovakia and Germany.

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