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Last Updated: Tuesday, 27 September 2005, 08:29 GMT 09:29 UK
O2 ups forecast for Germany, UK
O2 launch
O2 says joint ventures helped boost its business
Mobile phone operator O2 has raised forecasts for the year on the back of strong growth in customer numbers.

The group said it expects UK revenue growth of 6-9%, compared with previous expectations of "low single digit growth".

Europe's sixth largest mobile phone group also expects margins to be boosted by strong growth in its German market, despite tougher competition.

The trading update came ahead of the firm's half year results in November.

"The strong growth that we reported across all our businesses in the first quarter was maintained into the second quarter, and this will be reflected in our first half results," chief executive Peter Erskine said.

Customer surge

The company added that joint ventures with Tesco in the UK and Tchaibo in Germany had helped increase customer numbers.

As a result the firm said it had an active customer base of more than 15 million, adding it expects earnings before interest, tax, depreciation and amortisation margins to remain "broadly stable" for the year.

In May, the group unveiled pre-tax profits for the 12 months to 31 March of 309m ($566m; 499m euros), up from 95m a year earlier. Sales rose to 6.68bn from 5.65bn.

Shares in the group, which operates in the UK, Germany and Ireland, have surged recently, though the rise has been driven mainly by takeover rumours.

In August, takeover talks ended between Dutch peer KPN and German telecoms giant Deutsche Telecom on a takeover bid for O2.

The trading update came as internet bank Egg also announced plans to team up with O2 for a new service that will allow the bank's customers to access their accounts through their mobile.

Using O2's new i-mode service - which gives people high-speed internet access via their handset - customers will be able to check balances and transfers on their Egg accounts.

If the trial involving Egg's savings Money spending and credit accounts is a success the bank will expand the service.

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