Telecoms profits contract as broadband grows

Margins in the telecommunications sector narrowed in the first quarter as revenues for fixed line and mobile calls shrank, an Ofcom...

Margins in the telecommunications sector narrowed in the first quarter as revenues for fixed line and mobile calls shrank, an Ofcom report revealed this morning.

According to Ofcom's market update for Q1 2009, total fixed line revenues fell by 4.4% year-on-year to £2.2bn in Q1 2009. Mobile revenues (for Vodafone, O2, T-Mobile and Orange) fell by 3.7%.

UK residential and small business broadband connections grew by 281,000 (1.6%) to 17.6 million during the quarter (up 8.4% year-on-year). Most of this was because of increasing numbers of LLU-based (local loop unbundling) connections, Ofcom said.

BT's retail broadband market share dropped slightly from 26.5% at the end of March 2008 to 26.4% at the end of March 2009.

Ofcom said fixed voice call volumes (excluding NTS calls) fell by 7.5% to 34.9 billion minutes. This was driven by a 9.2% fall in the volume of calls to mobile numbers.

In contrast, total call volumes for the four mobile operators grew by 6.8% year-on-year to 25.7 billion minutes in Q1 2009. This was driven by a 7.1% increase in calls to UK numbers and a 9.0% rise in international calls. Roaming call volumes were 13.6% lower than in Q1 2008, Ofcom said.

Mobile messaging was also up, with subscribers sending nearly 104 messages per month in Q1 2009 compared to 84 in Q1 2008.

The number of mobile subscribers declined by 1% in Q1 2009 to 68.1 million, compared to the previous quarter but was 1% higher than Q1 2008. Post-pay subscribers accounted for 49% of total subscribers in Q4 2008, compared to 46% in Q1 2008.

 Mobile subscribers Q1 2009          
   Vodafone  O2  T-Mobile  Orange  Total
 2008 Q1 16,132 18,353 17,124 15,756 67,365
 2008 Q2 16,177 18,678 16,794 15,757 67,406
 2008 Q3 16,522 19,080 16,802 15,815 68,219
 2008 Q4 16,565 19,470 16,786 15,995 68,816
 2009 Q1 16,018 19,580 16,684  15,850

68,132

Source: Ofcom

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