SERVICE REVENUE at Telefónica O2 Ireland fell to €225 million for the three months to the end of June, a fall of 4.9 per cent on the same period last year.

Revenue declined despite the mobile phone operator adding almost 25,000 net new customers to achieve its highest customer base to date of 1.688 million in the quarter, an indication of increased competition in the market and a tougher economic landscape.

Monthly blended average revenue per user (arpu) for the quarter showed a slight decline to €43.20, compared with €43.40 in the first quarter of the year, according to O2 Ireland.

For the quarter, monthly average arpu for postpay customers was €73.80, down from €75.50 in the first three months, and monthly average arpu for prepay customers was €26.90, up from €26.70 in the first quarter.

A total of 540 million text messages were sent during the three-month period, representing a 33.6 per cent rise in text usage year on year, up from 404 million in the second quarter of 2007.

Despite the fall in arpu, Paul Whelan, chief financial officer, Telefónica O2 Ireland, said revenue in other areas was increasing.