O2 Telefónica, one of the leading telecommunications companies in Germany and a subsidiary of the Spanish Telefónica Group, has reported stagnant sales figures for the first quarter of 2024. Despite a constant group revenue of around 2.1 billion euros, which is equivalent to the previous year's level, the company was able to increase its profitability: The operating result (Ebitda) adjusted for special effects grew by 5.1 percent to 640 million euros.
While revenue in the mobile service business, the core segment of O2, increased by only 0.7 percent to 1.4 billion euros, the company is faced with an imminent challenge: the switch of partner 1&1 to Vodafone as a national roaming partner in the summer. This move will have significant financial implications, as a mid-single-digit percentage of O2 Group's revenue is currently generated by United Internet's subsidiary 1&1, which has been using the O2 network up until now.
Despite the impending loss of 11 million network users, O2 CEO Markus Haas remains optimistic about fully offsetting this decline in revenue by the end of 2026 through new customer acquisition and partnerships with other stakeholders. The continuously growing demand for 5G mobile communications is seen as another growth driver.
The heading you provided is already in German, but here is the English translation:
"Furthermore, the company plans to reduce costs through efficiency measures and to improve workflows, which should have a positive impact on the operating results. Haas emphasizes that O2 customers generate significantly more revenue on average than 1&1 customers, which could potentially compensate for the loss of several 1&1 customers through the acquisition of a single new O2 customer."
These strategic plans are intended to help O2 Telefónica close the gap created by the switch of 1&1 to Vodafone and continue to exist as one of the three major mobile network operators in Germany.
The translation of the heading into English is:
"Telefónica's stock traded slightly up in Madrid following these announcements, reflecting the market's confidence in the company's strategic direction."
