Full contracts lift O2

O2, the UK mobile arm of Spain's Telefonica, has added almost six times as many customers on full contracts during the first nine months of this year as it did in the whole of 2011.

The mobile giant said it has also now passed the point where most of its UK customers are on the more profitable contracts than on less lucrative pay-as-you-go charges. Smartphones continued to drive new sales but the company said the UK remains "aggressively competitive".

Smartphones accounted for 89 per cent of this year's handset sales and 44 per cent of O2's 22.5 million mobile customers now own one.

The Tesco Mobile joint venture, which is not included in O2's total customer base, grew by 20 per cent year on year to reach 3.3 million customers at the end of the quarter.