mm02: Regulator could put the brakes on profits

But other than that, we're happy...

mm02 has announced profits are likely to come in broadly in line with predictions – but cautioned that regulators' price cuts may see it doing less well in the future. The former mobile arm of BT said it expects strong customer gains for the first half, with the company on target to deliver its 10 per cent service revenue growth and 30 per cent profit margin for the year in the UK. mm02 warned, however, that the second half is likely to be more competitive, saying that it expects revenue growth "to slow significantly" in the coming months as it begins to feel the pinch of Oftel's decision to enforce cuts in termination rates. The news for the German branch of the mobile provider was more promising, with buoyant growth in customers, revenue and ARPU, with the company performing better than expected. Peter Erskine, mm02 CEO, said in a statement: "We expect this performance to be sustained through the second half, despite an increasingly competitive market environment. Across the group we will pursue further operational efficiencies." Erskine also said that in the latter six months of its year the group would be stepping up its 3G investment in preparation for the launch of new services "when the conditions in our markets are right".