UK customers are spending more

The firm said 603,000 customers were added over the quarter, beating analysts' expectations.

A big rise in UK user numbers led to MMO2 lifting this year's UK revenue growth forecast to 7-10%, compared with its previous forecast of 5-8%.

MMO2 is Europe's sixth-largest mobile phone operator with 21.3 million users.

In February this year, the firm rebuffed a takeover approach from Dutch rival KPN.

Aggressive

The mobile phone market in the UK is fiercely competitive and Hutchison's 3 business has been piling on the pressure in recent months with aggressive pricing plans.

But MMO2 said it had added 261,000 new customers in the UK over the quarter - with more than half of these being higher-paying contract customers.

The success was put down to more spending on marketing and a successful campaign to win business from small to medium-sized firms.

Among UK contract customers, average revenue per user (ARPU) - a key measure for mobile firms - rose to �537 ($993m; 805 euros) a year, up from �525 the previous quarter.

Overall ARPU in the UK rose to �279 - up from �272 in the previous quarter and �25 higher than the same period last year.

In Germany - MMO2's other main market - it added 336,000 customers, with ARPU up to 367 euros (�245) - up from 366 euros in the January to March period.

However, in Ireland ARPU fell to 556 euros, from 559 euros the previous quarter.

MMO2 said that data services - such as photo messaging - now account for 20.9% of service revenues, although the bulk of these are still generated by simple text messages.