Recycle your old phone and get Smart with O2!

O2 managed to increase their customer base by more than 335,000 new clients in the final three months of last year. That and the more than 60,000 broadband customers bolstered its status as Britain’s largest, most prolific mobile phone company. Many of its new customers also managed to cash in by recycling old mobile phones.  Apparently new owners of iphones cashing in by recycling Nokia N95s, a few even recycling a Nokia 97.

O2 was quick to add the caveat that such healthy bottom lines may not always be the case. Due to the uncertain and changeable economic climate, the growth rate in Britain could likely begin to dawdle. Even the more than 21 million customer strong company, O2 could feel the hit. Chief executive of Telefónica Europe, Matthew Key was reported as saying, “Do I expect the trends [of growth] in the UK to continue?” Telefónica Europe is a parent company of O2. He went on to say, “Yes,” in response to being asked about continued UK growth. “But the UK market is probably the most difficult to call,” He began questioning whether or not the market would continue expanding at the healthy rate that it has in the past. His prediction? “Probably not.”

Aside from the effect of the slashing of wholesale rates which were put in place by Ofcom, O2’s expansion in profits in the British market increased by 8 percent in the final quarter of the year. This is held up by their swarm of smart phone customers. According to Key, O2 counted five million smart phone customers in Britain. Included in that number is two million iPhone clients. These clients accounted for £650 million in profits from data usage last year. Key expounded, “This is now big business for us.”

Key stated that the conclusion of the exclusive rights to market the iPhone in Britain had generated some challenges for its network. However, he went on to explain that O2 is still surpassing the competition in terms of generating new customer contracts for the Apple phone. Mr. Key explained the situation, “Clearly Vodafone and Orange volume is incremental to what we’re doing.”

The Christmas rush of new customers signing up for new contracts has many wondering if this is a sign that the cellphone market is once again got a pulse and going to be up and running once more. T-Mobile and Orange are looking for approval in Europe to merge on Monday. Virgin Media along with these two companies are showing impressive increases in new customers in the last quarter of the past year. The Christmas period made all the difference for Vodafone. The market has also been leveraged by the increased access  to recycle mobile phones for money.

According to Matthew Key, the Christmas season brought a nice present to mobile phone companies in the UK with a total of 1.4 million new customers for all companies combines. Key was reported as saying, “This doesn’t pass the sense test.”

Typically, what we see during the Christmas shopping season is a pay-as-you-go customer base bump. However, this year cell phone companies as a whole–with the sole exception of T-Mobile–were pleasantly surprised by people lining up sign on for long-term contracts. This is attributed to the desire for smart phones. The total contract growth for O2 was 1.1 million for the entire year. This was an increase of 19 percent. In terms of monthly customers, O2 had 235,000 monthly pay customers. The long-term contract end of their business makes up just less than half of their entire base.

In order to keep customers who already had an iPhone or a smart phone, O2 enticed retention by throwing in a Sim-only package. This helped bump up the lower end of the market for the company. This made 300 minutes £15 per month. That’s for unlimited texts and data usage, including wi-fi usage. Customers had to sign up for a full year contract. It’s still a deal for customers, who save £20 each month versus what they would’ve paid for a new iPhone.

This sealed O2’s status as one of the top expanding market players in the broadband game. They expanded with almost as many fresh high-speed online users as Virgin Media during the final quarter of the year. O2 nearly doubled its subscriber base throughout the entire year. They will be introducing fixed-line telecoms service to the market around May of this year. They now boast nearly 600,000 internet customers.

What say you?