O2 refused to be drawn on its future as an independent mobile operator yesterday as it lifted its full-year guidance for its key UK and German businesses.

The company, which also runs a network in Ireland, has been the centre of takeover speculation since it was demerged from BT in 2001 because of its lack of scale relative to its rivals and its strong position in the UK market.

David Finch, chief financial officer, yesterday hailed O2 as one of the "winners" in the UK market, continuing the theme set by Peter Erskine, chief executive, earlier this year, when he suggested one of the five network operators could fail in 2006.

Bid rumours have intensified around O2 in the past few months amid a wave of acquisitions in the European telecoms market, culminating in confirmation from Germany's Deutsche Telekom and Holland's KPN last month that they had held exploratory talks about a joint bid, but decided against making a move. - (Financial Times Service)