Telefónica O2 Ireland

Performance highlights for the 3 months ended 30 September 2008

• Telefónica O2 Ireland's total revenues were €714 million for the nine month period
• Telefónica O2 Ireland total ARPU €43.4
• For the first nine months OIBDA was €228 million euros
• Customer numbers reached 1.7 million customers, 4.9% higher than at the same time last year.
  

Telefónica O2 Ireland third quarter operating review
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Business highlights

iPhone 3G to launch in Ireland
Telefónica O2 Ireland confirmed on 10 June that it would be the exclusive Irish carrier for Apple's eagerly anticipated iPhone when it launched in Ireland on 11 July. The 8GB iPhone 3G costs just €49 on the €100 monthly iPhone tariff, €99 on the €65 tariff and €169 on the €45 tariff. The 16GB iPhone 3G costs €129 on the €100 monthly tariff option, €169 on the €65 tariff and €229 on the €45 tariff. All iPhone tariffs include anytime minutes, texts and a 1GB data bundle.

In a separate announcement, O2 and Bitbuzz, Ireland’s leading Wi-Fi service provider, have agreed a new deal to provide O2’s iPhone customers with free access to Bitbuzz Wi-Fi hotspots throughout the country. The deal, which is for an initial duration of 2 years, will cover the provision of Wi-Fi internet access at all Bitbuzz locations in the Republic of Ireland and Northern Ireland – 155 in total. Under the new deal, access to the Bitbuzz service will be unlimited* for O2 iPhone customers.

Raising brand awareness
O2 brand recognition continues apace, bolstered by a groundbreaking advertising campaigns.

Brand awareness is further supported by high-level sponsorships and associations. These included O2 in the Park, official sponsor of the Ryder Cup 2006 in the K-Club, Co. Kildare. and our association with golf and rugby sporting stars. In the business arena, O2 also sponsors the O2 Ability Awards, the first awards programme to acknowledge and profile Irish businesses that are demonstrating best practice in the employment of people with disabilities.

Another important development has been the opening of the O2 Experience Stores. With its exciting styling, friendly service and "try before you buy" offer, this new retail concept has proved highly effective in bringing us closer to customers.

Maintaining network quality
Our success is underpinned by our networks, which are rated among the best in the world. We continue to build our network in a cost-efficient and environmentally friendly way and, where possible, to share existing sites with other mobile operators and utilities providers.

Mobile Data
O2 has consistently aimed to grow the market for non-voice services, i.e. text messages, picture messages, GPRS (General Packet Radio Services) Wireless LAN, O2 Instant, Mobile Marketing, Sales and Field services, Fleet Management and Remote Control Services.

The increased usage of text messaging is driven by a young population keen to benefit from the low cost of text messages.

Ireland launches Broadband
On 9 July 2007, Telefónica O2 Ireland launched its O2 Broadband service, offering wireless broadband at speeds of up to 3.6Mbps, utilising HSDPA (High Speed Downlink Packet Access) technology, which currently covers 75% of the population.

The service continues to exceed expectations, offering a real alternative to fixed broadband in the home in a market that is under penetrated and has good growth potential.

Telefónica O2 Ireland joint venture with Tesco
At the end of October 2007, Tesco Mobile launched in Ireland, using O2's network via a 089 prefix. Customers pay 20 cents a minute for calls to any network at any time, with all text messages costing 9 cents. Special bundles, In Touch 10 (10 days) and In Touch 30 (30 days), provide unlimited calls, texts and picture messages for €4.99 and €11.99 respectively to other Tesco Mobile customers.

Napster Mobile
In December 2006, Telefónica O2 Ireland became the first mobile operator in Europe to offer Napster Mobile. The service allows customers to search, browse, preview and purchase content from Napster's music catalogue of over two million songs. The service also features a "recommendation engine" which makes suggestions based on each customer's personal taste in music.

Looking ahead
Telefónica O2 Ireland will concentrate on maintaining its edge in a highly competitive and increasingly regulated environment. We will continue to put our customers first and to build on the growing demand for data services.

In February,  we launched O2 experience which is the only prepay price plan in Ireland that offers customers the ability to send unlimited free texts to any other Irish mobile network, at any time, for life. In 2008, we expect O2 experience to significantly shake up the prepay marketplace and we'll continue to market this campaign throughout the year.

For further information regarding Telefónica O2 Ireland and our products and services, please visit: 
http://www.o2.ie/