Features, Industry, Insight

O2 Telefónica achieves success through 5G

By Daniel Bardsley, Journalist

Democratising access to a sustainable digital future through 5G creates a better life for everyone, MWC Barcelona 2022 has heard during a keynote presentation.

Mallik Rao, the Chief Technology and Information Officer and Member of Executive Board at Telefónica Deutschland.

At the Huawei Day 0 Forum, “5G Lighting up the Future,” Mallik Rao, the Chief Technology and Information Officer and Member of Executive Board at Telefónica Deutschland, explained how O2 Telefónica had achieved business success through its leading 5G network.

He told delegates that the company had recorded a second year of strong delivery and, as a result, was well on track to achieve its mid-term guidance.

In a further upbeat assessment at MWC Barcelona, which runs until March 3, he explained to the forum that the company was experiencing “continued growth momentum” into the 2022 financial year.

Recapping O2 Telefónica’s strategy, Mr Rao explained that the ambition to boost revenues and outperform the market was based around mobile growth, securing more market share in the business-to-business sector, employing smart bundling (including FMS) and network parity.

This approach, Mr Rao outlined, has already reaped rewards. Between 2020 and 2022, cumulative revenue growth has been at least 5% and there have been ongoing improvements in margins (when adjusted for exceptional effects and the impact of the Covid-19 pandemic).

The capital expenditure (Capex) to sales ratio peaked in the 2021 financial year and is normalising towards the end of the 2022 financial year.

During his keynote, Mr Rao gave a string of other statistics that highlighted O2 Telefónica’s success in the 2021 financial year.

Revenue was up 3.1% (2.6% when adjusted for exceptional effects impacts), and operating income before depreciation and amortisation (OIBDA) increased 3.9% (1.8% excluding non-recurrent special factors).

The Capex to sales ratio in FY2021 was 16.5%, while the company achieved 1.5 million net adds (postpaid excluding 203,000 machine-to-machine or M2M) and O2 churn was 0.9% (for O2 postpaid).

The company is gaining market share in the business-to-business sector, and network parity and price-value-leadership have been achieved.

Also, O2 Telefónica showed leadership in environmental, social and governance (ESG), securing a “ESG Industry Top Rated” accolade from Sustainalytics.

By executing clear priorities, the company is “building the best O2 Telefónica ever”, a presentation delivered during the keynote outlined.

Part of this is about equalised network quality, with O2 being named “Very Good” in the connect network test for the second time in a row. This puts the company on a level with its competitors and demonstrates its high quality network with excellent customer experience (CEX).

Another part of the strategy is to accelerate 5G roll-out and build further enterprise uses cases while continuing savings initiatives through additional sharing opportunities.

Technology evolution is also key to O2 Telefónica’s offering. This centres on IT transformation for an enhanced customer experience, which offers simplification and supply chain diversity, and Cloud, which is a “central factor” in the company’s technology platform strategy.

Concluding his keynote, Mr Rao described how 5G network provides new opportunities for both consumers and businesses.

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