Smartphones increase O2 revenues


Smartphones, such as Apple's iPhone, account for seven out of 10 new mobile contracts

Mobile phone giant O2 has reported higher UK sales growth as more customers upgraded to smartphones with mobile internet access.

UK revenues rose 9% in the final quarter of 2010 as O2 sold more smartphone handsets, such as Apple’s iPhone and Blackberry’s Torch, and benefited from increased mobile internet use.

O2 also introduced data caps at the start of October, which means customers will be charged if they exceed download limits, as part of its plans to make more money out of mobile internet downloads.

The fourth quarter revenue rise followed increases of 8.5% and 6% in the third and second quarters respectively.

UK customer numbers rose 4.3% to 22.2 million in the year, with smartphones accounting for seven out of 10 new contracts.

The average revenue per customer from downloading information from the internet increased by 5.3%, whereas the average income from calls declined 6.5%.

Underlying operating income rose by 4.9% to 1.8 billion euros (£1.5 billion) in 2010, while revenues were up 6.5% to 7.2 billion euros (£6.2 billion).

Last year, 02 UK’s chief executive Ronan Dunne said the company was pumping £1 million a day into improving its network for mobile internet use as it sought to gain a greater share of this growing part of the market.

The strong results in the UK helped parent company Telefonica Europe record a 4.9% increase in underlying operating income to 4 billion euros (£3.4 billion) in the year.

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