iPhone continues to boost O2 results, and looks to Palm Pre to do same

While other European mobile operators announce dismal quarterly results, O2 continues to power ahead with subscriber gains and increasing data usage seemingly being driven by the iPhone.

The company claims to be relaxed about its exclusive distribution deal for the iPhone: "We have a multi-year exclusive contract with Apple," said O2's European CEO, Matthew Key. "We are very happy with them, they are very happy with us, it is mutually beneficial relationship."

Key claimed that the new iPhone 3GS had been attracting consumers since it was launched in June. "We sold 50 per cent more over the first weekend of the 3GS compared with the 3G. It is selling fantastically well," he added.

The UK arm of O2 added almost 400,000 new subscribers during the first six months of the year, with 43 per cent of its total customers now contract subscribers. Data ARPU was also up by 1.7 per cent compared to H1 2008 reaching €9. This was driven by more of its subscribers accessing the internet via their phones but also took into account a drop in SMS activity.

Commenting on the exclusive deal to distribute the Palm Pre, Key denied that it was about hedging his bets. "What we are about is bringing the best devices to customers and we believe the Palm Pre, from a customer experience perspective, is a great device." The company has yet to publish what it will charge for the Palm Pre, but Key provided some insight by stating: "We will probably do it on post-pay and pre-pay. But whether we will do it on pre-pay this side of Christmas is a different question."

For more on this story:
The Guardian
and NMA

Related stories:
O2 to crack down on iPhone tethering cheats
SIM-only and iPhone boost O2 subscriber numbers
Rumour mill: O2 to lose iPhone exclusivity, but win Palm Pre deal
Orange France loses iPhone exclusivity; will UK follow?

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