MOBILE OPERATOR O2 Ireland's announcement that it has signed an exclusive deal for Apple's iPhone overshadowed details of fourth-quarter results yesterday, writes John Collins.
The combination phone, music player and internet access device will go on sale in Irish shops on March 14th for €399 or €499, depending on the model. Customers will need to commit to an 18-month contract for at least €45 a month. Unlike other handset manufacturers, Apple seeks a cut of the service revenues generated from its phones. O2 is betting that the iPhone, which makes it easy to access the web and other internet services, will drive up its data revenues. "The iPhone is just a phenomenally different experience," said O2 Ireland chief executive Danuta Gray.
Data revenues, including text messages, accounted for 27.9 per cent of O2's overall service revenue in its fourth quarter to the end of December last. This was up from 26.5 per cent the previous quarter and 22.1 per cent a year previously.
iPhone buyers will have to commit to an 18-month contract with O2, which will cost between €45 and €100 per month. Although O2 UK provides unlimited downloads with its iPhone tariffs and includes free Wi-Fi access via the Cloud network, Irish customers will be capped at 12 gigabytes before additional charges of two cent per megabyte kick in.
"Twelve gigabytes is a significant amount of data and should be more than enough for the vast majority of our customers that will use the iPhone," said an O2 spokesman.
The iPhone, with its unique touchscreen interface, was launched in the US last June, with queues forming outside shops, although relatively few sold out. O2 has begun taking pre-bookings for Irish sales.
The release of O2's key performance indicators saw it cement its position as Ireland's second-largest operator with 1.646 million subscribers at year end.
The average spend by all users in the fourth quarter was €45.70, down from €47 in the previous quarter. O2 generated €231 million in revenues from services in the quarter, up 3.7 per cent.
The reduction in average revenue per user was due to the introduction of "value-led propositions" such as free texts for certain pre-pay customers, according to chief financial officer Paul Whelan. O2, which is now part of the Spanish-owned Telefónica group, said it had 41,000 subscribers to its mobile broadband product at the end of the year.
