mm02 makes first profit since BT split

Today's half-year results from mm02 show the mobile operator has turned a profit for the first time since its split from BT, almost two years ago.

The profit in question is £26m for the six months ended 30 September, as it saw its customer base rise by 13 per cent, topping the 19 million mark. The profit marks a significant turnaround for the group – which covers operations in the UK, Germany and Ireland – which was showing a loss of £259m last year.

mm02 puts the new outlook down to its efforts over the last two years, especially its focus on achieving growth as well as "operational improvement and financial discipline".

Both operating profit and earnings were also on the up, with earnings growing by a fifth to reach around £2.7bn, while the group's operating profit hit £167m – a huge jump on 2002's £8m.

The great white hope of the mobile industry also boosted the group's finances, with data services rising slightly to make up 19.2 per cent of revenues as a whole. mm02's customers' thumbs have also been contributing to the group's coffers, with users sending a record 2.6 billion texts.

mm02's UK arm, 02 UK, managed to raise customer numbers by 10 per cent to 12.6 million and increase the average revenue per user to £259 – by attracting the youth market. The increasing popularity – and decreasing cost – of camera phones has also contributed a few pounds to O2's profits, with over 1.6m picture messages being sent by customers – compared to 643,000 in the whole of 2002.

mm02's German wing outperformed its UK cousin, however, clocking up a rise in customers of 22 per cent.

Peter Erskine, mm02 CEO, said that while he thinks that the coming months will be tough, he is optimistic about the future. "In the second half we expect intense competition in our two main markets but we are aiming to build on what we achieved in the first half and deliver our full-year growth and margin targets," he said in a statement.

The success of mm02 since its demerger from BT could be causing some wringing of hands at the latter, whose half year results actually showed a drop in profits – one analyst suggested that should BT have hung on to its mobile arm, the story would have been different.

The results also saw the announcement that the company's 'music over mobile' service, allowing customers to download and store music on their phones, will be launched imminently.