O2 users cut back on calls, new phones

Mobile spend drops 3.6 percent

O2 Thursday announced that the amount of money it made from each UK customer in the past quarter has dipped by 3.6 percent. The company said this represented better value for its customers, as O2 has carried just under 12.8 billion minutes of calls in the period - a 17.5 percent increase.

O2 also said that larger bundles of SMS text messages mean it has seen a reduction in the amount of money it makes from texting.

O2 said that contract customers are increasingly eschewing new handsets when their agreement ends, retaining existing phones and taking the better value tariffs on offer.

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O2's published average revenue per user (ARPU) was 24.20 a month in the most recent quarter. This represents a year-on-year decline of 3.6 percent - down from 30.10 in the same period last year and 27.10 in the previous quarter.

Good news comes in the form of 'steady' iPhone sales, the popularity of mobile broadband dongles, and the success of profitable SIM-only tariffs.

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All three factors combined to see O2 increase its contract customer base by 286,000 customers over the three months to March. Despite a loss of around 144,500 pre-pay customers, this has seen O2's total user base increase to 20.4 million.

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