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O2 continues to splash out on 4G ahead of rumoured IPO

Also announces partnership with Cisco to throw £80m at London coverage

Mobe operator O2 continued to splash cash on its 4G network in its final quarter results, with industry watchers believing it is moving at pace to complete its commitments before an IPO at the end of the year.

O2's daddy Telefónica reported UK sales of €1.6bn (£1.35bn) for the quarter, with earnings before interest, tax and depreciation up 0.6 per cent to €416m (£351m).

Capital expenditure for the quarter increased 31 per cent to €225m (£190m) as the company continues to build out 4G coverage to 98 per cent of indoor coverage target by the end of 2017, versus the current 96 per cent.

Philip Carse, analyst at Megabuyte, noted that the significant jump in capex had affected O2's free cash flow. He said: "It is perhaps unsurprising therefore that an IPO has been rumoured towards the end of 2017, by which time O2UK will have met its obligations, capex will be trending downwards and [cash flow] upwards."

Today the company also announced a partnership with Cisco to invest £80m to ramp up London's small cell network – part of its joint venture with Vodafone to give professionals in the City speeds of up to 1Gbps.

O2 is one of the smaller network operators, holding just 15 per of spectrum. Three, which has just 12 per cent, planned to consolidate its share of the air by buying O2.

However, Telefónica's hopes of flogging off its UK biz to Three's owner, Hutchison Whampoa, for £10.5bn were squashed by the EU. ®


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