TESCO AND O2’s joint mobile phone venture had a deficit of €7.3 million by the end of last year, with the partners having spent a total of €8.5 million on the business.
The companies launched Tesco Mobile Ireland in mid-2007. The supermarket supplied handsets and a service on O2’s network.
According to accounts for the business just lodged with the Companies’ Registration Office (CRO), Tesco Mobile Ireland had a deficit of €7.3 million on its balance sheet on December 31st last year, compared with €3.1 million at the end of 2007.
The accounts state that its operations made a loss in 2008, but do not say how much money it lost. As it is classed as a small company, it is only required to provide a balance sheet and does not have to publish its profit and loss account.
A spokesman for the company would not elaborate on its performance last year, and did not provide any details on the number of subscribers that it has recruited.
The accounts state that the shareholders, Tesco Ireland and Telefónica O2 Ireland, put up €11 million to finance its launch and development in July 2007. The mobile operator drew down €2.5 million of this in 2007, and €6 million last year, a total of €8.5 million. This left it with €2.5 million of its original funding.
The accounts state that the shareholders “have agreed to provide financial support to the company for a period at least until 30 June 2010, to the extent that funds are not otherwise available, to enable the company to meet its obligations as they fall due”.
The directors, John Paul O’Reilly and Geoff Byrne, believe the company will have sufficient funding for its operating requirements for this period.
The €8.5 million it has spent came in the form of interest-free, unsecured loans from its shareholders. According to its accounts, €1.5 million of this must be repaid by December 31st next year, and the remaining €7 million 12 months later.
In a statement yesterday, the company said its shareholders were committed to the business.
“The business is progressing in line with our plans, and the nature of a start-up of this kind requires significant levels of investment in the early years,” the statement said. “As with other operators, Tesco mobile has adapted its offer to the changing market by introducing a new tariff earlier this year. This move is proving very popular with customers.”
The figures show the company had seven staff last year.
