MmO2 revenues lift off with texting boost

But is BT poised to leap back into the mobile jungle so soon after spinning off its own mobile arm?
Written by Graeme Wearden, Contributor

Mobile operator mmO2 has achieved significant increases in customer numbers, and a rise in the average amount that each user is spending on mobile services.

In the three months to the end of June 2003, mmO2 signed up just over half a million new customers, according to its latest financial results published on Tuesday. This gives the firm a total customer base of 18.7 million.

Some 258,000 of these new customers are based in the UK, swelling O2 UK's customer base to over 12 million. MmO2's figures show that the average UK customers spent £254 on their O2 phone service in the last 12 months, an increase of over 8 percent on the previous year.

This was partly due to a rise in the number of text messages sent by its customers. At 2.42 billion text messages, this was 2.8 percent higher than the previous quarter and an impressive 36.8 percent more than in the three months to June 2002.

The proportion of revenue that came from data services was up year-on-year, but slightly down compared to the previous quarter. According to mmO2, this fall was due to the success of its voice business.

"Data revenue showed continuing year-on-year growth, although the strong growth of voice revenues reduced the proportion of our total service revenue generated from mobile data in the quarter," explained Peter Erskine, chief executive of mmO2, in a statement.

Data revenue is seen as a key measurement of the long-term health of a mobile operator's business, given the push to encourage customers to use their phone for lucrative data services rather than merely voice calls.

Despite these encouraging results from mmO2, it looks like the company will soon face a new threat from BT, which demerged mmO2 -- its former mobile arm -- back in late 2001.

Reports claim that BT is poised to begin offering mobile services in partnership with T-Mobile, making it a much larger player in the UK mobile scene. Currently, the telco just offers some mobile services in partnership with mmO2.

Sir Christopher Bland, BT chairman, told The Times last week that BT was interested in using Wi-Fi to carry voice calls.

For a round-up of the latest on ISPs, broadband and related issues, see the Telecoms News Section.

Let the editors know what you think in the Mailroom.

Editorial standards