Tesco Mobile has recorded a modest loss for its Irish business after their revenues slumped down by 11% to £30.2 million. It means they went into the red in 2013 and booked a full year pre tax loss of £11,000.
The network, a joint venture between Tesco and O2 Ireland, was established in October 2007. It saw a lot of success for its first few years, but it has taken a major slump over the last year. New figures returned to the Companies Offices show that there had been a loss of revenues between 2012 and 2013.
However, it’s not all bad news for the Irish Tesco Mobile. Their sales costs did, meanwhile, jump by 8% to £17.7 million.
The directors of Tesco Mobile said in their report:
[quote]The key elements of the operation worked in line with the plan. Due to our compelling customer propositions, we have thrived in a very competitive market.[/quote]
The directors of Tesco Mobile also said that the mobile operator has now completed trading for their sixth year and that it’s continuing to grow. They said:
[quote]The business grew its base by 15% on the back of offers which are really resonating with our customers and supported by the roll out of phone shops nationally.[/quote]
One of the reasons that Tesco Mobile’s bosses remain so optimistic is related to their prepaid mobile sales. They say that the company has expanded its share of the prepaid mobile market in 2013.
[quote]The company launched a pay monthly proposition into the market place in October 2011. The company has based its business plan on continuing to grow market share in 2013.[/quote]
O2’s share in the business has changed hands over the last few years. Their stake in Tesco Mobile has now been sold to Hutchison Whampoa who also own the mobile networking provider Three in Ireland. Their are a Fortune 500 company and one of the largest businesses listed on the Hong Kong Stock Exchange.
The news of a slump into the red is worrying news for the already struggling Tesco brand. In April, it was announced that the company had seen a 6% fall in annual profits. This is the second consecutive year that Tesco has seen a drop in profits.
The lackluster performance has occurred since Philip Clarke took over the business as their Chief Executive three years ago. He is now under immense pressure from investors to turn the supermarket’s brand around and regain normality.