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Telefonica O2 debt mountain is likely to force sale of assets


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Old 27-02-2012, 20:31
Thine Wonk
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It seems the parent company of O2 has a 48 billion pound debt mountain according to Reuters.

It is expected that they will be selling off assets, there are rumours that O2 Ireland might go to the parent company of Three, Hutchison Whampoa. The FT says profits at the business have halved.

I wonder what (if anything) they will dispose of and I wonder how this will effect O2 UK and projects like Giffgaff, the money men are looking for savings and disposal.

In the UK the O2 mobile network has suffered its steepest quarterly fall in revenues since launch nearly 10 years ago reports the Guardian.

O2 grew its base of contract customers more slowly than rivals during the first nine months of last year and lost 220,900 prepay customers.

In the UK it looks as if they are losing business to rivals, but why I wonder?
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Old 27-02-2012, 21:14
Thine Wonk
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Another question, why do only 38% of O2's customers own a smartphone, that's incredibly low.
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Old 27-02-2012, 21:18
Axegrinder91
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Maybe because of the poor 3G coverage they used to have (or still have) is abit off putting i mean a key use is mobile data on a smart phone lol
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Old 27-02-2012, 21:18
Daveoc64
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Another question, why do only 38% of O2's customers own a smartphone, that's incredibly low.
Are there stats for all of the other networks?
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Old 27-02-2012, 21:36
Thine Wonk
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Are there stats for all of the other networks?
Well Ofcom said the average figure was 32% in 2009, now smartphones were a lot newer back then, I'd have thought smartphone usage would have gone up a lot since then with the newer iphones and lower cost Android handsets.
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Old 27-02-2012, 22:06
wavejockglw
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Well Ofcom said the average figure was 32% in 2009, now smartphones were a lot newer back then, I'd have thought smartphone usage would have gone up a lot since then with the newer iphones and lower cost Android handsets.
Usual selective dated information posted. The latest O2 figure is quoted below:

"Smartphone penetration was 38% by the end of 2011 compared to 29% in 2010 and 36% by the end of the third quarter. It said more than 95% of new handset sales to contract customers during the fourth quarter were smartphones."

http://www.mobiletoday.co.uk/News/14...one_spend.aspx

38% of 22.1 million is approximately 8.4 million which is more O2 smartphone users than some mobile operators total user base. Not all mobile customers want smartphones. Some simply want voice and text, others data and some only use mobiles for emergency use. Mobile networks have to be able to cater for the needs of all customers, not just the tech savvy.

O2 presently have the highest customer satisfaction of any UK network and the lowest number of escalated complaints to the UK Telecoms regulator (source Ofcom).
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Old 27-02-2012, 22:11
Thine Wonk
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O2 presently have the highest customer satisfaction of any UK network and the lowest number of escalated complaints to the UK Telecoms regulator (source Ofcom).
Completely irrelevant to this discussion though.

Maybe the problem is they are catering for the non tech savvy a bit too much and maybe that's why they saw the steepest quarterly fall in revenues since launch?

Where did the 220,900 prepay customers go?

Why are their home broadband customers leaving them?

What companies do you think Telefonica will sell due to the 48 billion pound black hole?
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Old 27-02-2012, 22:29
wavejockglw
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Where did the 220,900 prepay customers go?

Why are their home broadband customers leaving them?
Utterly off-topic nonsense.

Broadband Customers? What has that do do with a mobile phone forum thread?

Pre-Pay? Maybe they joined as contract customers or went to an O2 MVNO?

Bottom line is that O2 UK is the most successful mobile operator ever. It took two huge Eurpopean mobile telco ventures to merge to overtake them. O2 including MVNOs service 25 Million cusomers with a single owner. Everything Everywhere combined from 2 networks services around 28 Million. It's not difficult to understand which of those have been the most successful stand alone business and why Telefonica will invest and support O2 UK as it continues to perform well in a very compeditive market.

The real situation can be understood from the quote below:

"Telefónica CEO UK Ronan Dunne said: 'Against a backdrop of difficult economic conditions we remain firmly committed to our strategy which quite simply is about building a business for the future that goes way beyond our core mobile services. This is coupled with placing huge focus on looking after our existing customers with genuine, long-term value and experiences they won’t find elsewhere.'"

http://www.mobiletoday.co.uk/News/14...one_spend.aspx
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Old 27-02-2012, 22:33
Thine Wonk
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The real situation can be understood from the quote below:

"Telefónica CEO UK Ronan Dunne said: 'Against a backdrop of difficult economic conditions we remain firmly committed to our strategy which quite simply is about building a business for the future that goes way beyond our core mobile services. This is coupled with placing huge focus on looking after our existing customers with genuine, long-term value and experiences they won’t find elsewhere.'"
No, that's just quoting PR.
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Old 27-02-2012, 22:38
wavejockglw
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No, that's just quoting PR.
No comment ... as usual.... selective consumption of facts and predictable minimal response.

This thread is speculative nonsense. It's far more likely that Telefonica would take mega loss making 3 UK/Ireland off Hutchison Whampoa's hands than them selling a profitable asset to HWL.

No further response to this flamebait will be provided - thread now ignored.
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Old 27-02-2012, 22:51
Thine Wonk
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No comment ... as usual.... selective consumption of facts and predictable minimal response.

This thread is speculative nonsense. It's far more likely that Telefonica would take mega loss making 3 UK/Ireland off Hutchison Whampoa's hands than them selling a profitable asset to HWL.

No further response to this flamebait will be provided - thread now ignored.
Actually they made a profit last results, and if you think they will be buying Three from Hutchison then you are living in a dream world.

Telefonica has the biggest refinancing needs of any European telecom operator of 7 billion euros this year.

Moody's has put them on a negative outlook at the company risks credit downgrading, which means they must strip assets, not buy.

Bankers and analysts say Telefonica could sell off businesses in the Czech Republic and Ireland, but would likely to hold on to stakes in China Unicom and Telecom Italia, which they see as strategic.

You've speculated about Three being swallowed on many occasions before, (which has never happened) it's amazing how you react when the shoe is on the other foot.
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Old 27-02-2012, 23:00
wavejockglw
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Actually they made a profit last results.
On paper via HWL resilts.... not taking into account the £10 Billion investment....

As things stand Hutchison 3G UK look like the biggest loss making business in UK history.

This thread is still nothing but idiotic flamebait.... I'm gone from it.
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Old 27-02-2012, 23:03
Thine Wonk
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No further response to this flamebait will be provided - thread now ignored.
*comes back*

This thread is still nothing but idiotic flamebait.... I'm gone from it.
Make your mind up!

I notice you didn't come back to posts about Telefonica needing the biggest refinancing needs of any European telecom operator of 7 billion euros this year.

Yet you accuse others of selective posting, seems it's one rule for "one" and one rule for another.

As corporal Jones said in the classic comedy Dads Army "they don't like it up em".
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Old 27-02-2012, 23:08
reclusive46
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Has Three actually made a profit yet?
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Old 27-02-2012, 23:09
wavejockglw
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No doubt edited but.....

The last comment proves the point about flamebait and trolling.....

Bye....
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Old 27-02-2012, 23:09
Thine Wonk
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Has Three actually made a profit yet?
Yes http://www.bbc.co.uk/news/business-12878144

... and the UK business did last quarter too. Of course every big infrastucture business loses money to start with, Vodafone and BT lost money in the mobile business for many years to start with.

3G and 4G is one of the biggest technological innovations of our lifetime, the rewards will pay off, but it's still early days.
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Old 27-02-2012, 23:11
wavejockglw
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Has Three actually made a profit yet?
No.

The investment was over £10 Billion and paper profits with lots of accounting 'allowances' for depreciation etc have only shown 'profits' of a few million.

3 UK is to date the UKs biggest loss making venture.
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Old 27-02-2012, 23:14
The Lord Lucan
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Another question, why do only 38% of O2's customers own a smartphone, that's incredibly low.
Business contracts and PAYG is still a large percentage of their customer base. They did everything they could to stop new customers getting iPhones at every launch it must hurt them.

This is Unlike the other 3.

i don't think i'd be worrying about the debt as they ALL must be blowing profit right now and dipping into debt preparing to getting rid of 2G, filling the holes in the 3G coverage ready for that and rolling out LTE in the next 3 years. Lots of big money contracts have been signed and paid this year to enable that by them ALL.
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Old 27-02-2012, 23:16
Thine Wonk
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No comment ... as usual.... selective consumption of facts and predictable minimal response.

This thread is speculative nonsense. It's far more likely that Telefonica would take mega loss making 3 UK/Ireland off Hutchison Whampoa's hands than them selling a profitable asset to HWL.

No further response to this flamebait will be provided - thread now ignored.
No doubt edited but.....

The last comment proves the point about flamebait and trolling.....

Bye....

On paper via HWL resilts.... not taking into account the £10 Billion investment....

As things stand Hutchison 3G UK look like the biggest loss making business in UK history.

This thread is still nothing but idiotic flamebait.... I'm gone from it.
I think this thread now takes the award for the most sulking "exits" from an unhappy poster.
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Old 27-02-2012, 23:16
wavejockglw
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3G and 4G is one of the biggest technological innovations of our lifetime, the rewards will pay off, but it's still early days.
3G is all 3 UK have a licence for and they have had 9 years to make a profit. They have stated they managed to pull a few million but that is nothing compared with the Billions they have gambled to date. Will they get those back? Very unlikely. Meanwhile the accountants will try to paint as rosy a picture as possible to attract inerest from any others in taking 3 UK and Ireland off HWL's hands.
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Old 27-02-2012, 23:20
Star_Bright
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Charging 12p for texts doesn't help. I'll be joining T-mobile when my last bit of o2 credit has run out.
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Old 27-02-2012, 23:21
wilt
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You should work for a tabloid, wavejock. I am sure HM Govt. wouldn't agree with your sensationalist claim that Three are the 'biggest loss making business in UK history'.

And they should know, they're part owners of two contenders for that title.
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Old 27-02-2012, 23:22
Thine Wonk
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And still he comes back!!

It's not just about profit today, it's about what the company will be worth in the future too. However this has nothing to do with the opening post.
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Old 27-02-2012, 23:23
wavejockglw
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You should work for a tabloid, wavejock. I am sure HM Govt. wouldn't agree with your sensationalist claim that Three are the 'biggest loss making business in UK history'.

And they should know, they're part owners of two contenders for that title.
Outwith recent banking businesses I admit.

3 UK at around £10-12 Billion must be the UK's biggest private company loss making venture of all time. I bet Li Ka Shing wishes he had kept his profit from Orange's UK sale and invested it somewhere else.
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Old 27-02-2012, 23:26
Thine Wonk
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But Telefonica has the biggest refinancing needs of any European telecom operator of 7 billion euros this year and has 48 billion pounds of debt.

Why don't you want to discuss that Wave, and instead deflect the conversation away from this weeks news to an old favourite bashing subject?

Li Ka Shing might be picking up O2 Ireland, that's the news this week, that's the topic of this thread, not some knee jerk bashing because you don't like that it might be the case.
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