O2 Ireland, the Republic's second largest mobile operator, has reported that average revenue per user increased in the second quarter to the end of June to €46.70.

This is up 5.6 per cent from the previous quarter and up 1.5 per cent from the same quarter a year ago. This is in contrast to Vodafone which recently reported a 6.9 per cent annual decrease in such revenue for the same period.

Total revenue from services was €237 million, an increase of 4.5 per cent on the same period last year.

Paul Whelan, chief financial officer with O2 Ireland said revenue-per-earner growth increased due to a rise in the average monthly minutes being used and an increase in the number of bill-pay customers.

Contract customers continue to be a sweet spot for mobile operators. O2's pay-as-you-go customers spent an average of €30 during the quarter while contract customers spent an average of €83.80.

Overall O2's customer numbers were relatively static at 1.631 million although bill-pay customers increased by 13,800.

O2 introduced a mobile broadband product after the close of the second quarter. "Early indications are that sales of O2 broadband are exceeding expectations," said Mr Whelan.

Over the last year, O2 has seen a significant jump in the proportion of its revenues derived from data services. Data revenue as a percentage of overall service revenue was 25.09 per cent during the quarter, up from 20.54 per cent a year ago. The vast bulk of these revenues appear to be drawn from text messaging.

Some 404 million texts were sent by O2 customers during the three months, representing a 3 per cent increase in usage on the same period last year.

O2 is part of the Spanish Telefonica group, which posted a better-than-expected 66 per cent rise in first-half net profit yesterday.

Net profit came in at €3.83 billion.

As a result Telefonica raised full-year group targets to 8-10 per cent growth in revenues, a 10-13 per cent rise in core earnings and a 19-23 per cent rise in operating profit . (Additional reporting: Reuters)