O2 raises revenues forecast

Mobile phone company O2 today said it added 474,000 customers in the UK in the second quarter, reinforcing its position as one of Britain's fastest-growing networks.

O2, which is now owned by Spain’s Telefonica, currently has 16.8 million UK customers, up more than 15% on a year ago.

Given the growing number of customers, O2 updated its UK revenues growth forecasts to between 8% and 11% for the 11 months to December, up from the 6% to 9% previously indicated.

On Monday, rival Vodafone said its customer base in the UK fell by 119,000 in the quarter to 16.2 million because of the extremely competitive market.

Meanwhile, Orange, owned by France Telecom, posted revenues of €2.87bn in the UK for the first half to June 30, an increase of 2.2% on last year. It said its customer base rose by 3.4% over the year to stand at 14.8 million UK customers.

Chief executive of O2, Peter Erskine, said the UK business performed well despite intense competition.

“We have continued our strong start to the 2006 financial year,” he said.

O2 has benefited from an image update with a new slogan, “It’s your O2”, used across its advertising. This was launched with the offer of 100 free music video downloads for every customer and free access to a mobile version of Streetmap, a mapping and location service, for three months.

Across the O2 group, which includes Ireland, Germany and the Czech Republic, it gained 800,000 customers taking its total base to 33.58 million. Text message volumes grew by 26% to six billion year on year.

Last month, O2 announced its move into the broadband market with the £50m (€73.1m) acquisition of Be gaining all of Be’s existing broadband network plus its customer base.

O2 de-merged from its parent company BT in 2001 and was taken over by Telefonica earlier this year.