MmO2 today reported first half revenue growth ahead of expectations, but warned of a significant slowdown in the second six months of the year.

The Slough-based mobile network operator said more customers and higher income per user helped it speed up net service revenue growth in the UK in the first half.

It said it now anticipated growth for the full year between 9% and 12%, against previous expectations of 7%-10%.

However, the company - formerly owned by British Telecom - said it expected service revenue growth "to slow significantly in the second half".

It said this would be due to a 30% cut in call charges imposed by regulator Ofcom on September 1 and continuing competition in the UK.

Chief executive Peter Erskine said, however, that the group was achieving the faster growth without diluting earnings margins, which would remain stable for the full year on a like-for-like basis.

"The strong growth we reported across all our businesses in the first quarter was sustained into the second quarter and this will be reflected in our first half results," he said.

"O2 UK continues to perform well in a highly competitive market."