02 sold 2 mln iPhones in UK, Germany improving

LONDON Wed Feb 3, 2010 7:01pm EST

LONDON Feb 4 (Reuters) - Telefonica's (TEF.MC) O2 mobile operator has sold 2 million Apple (AAPL.O) iPhones in Britain and seen good sales of the Palm PALM.O Pre smartphone, helping it to enjoy a good end to 2009 in the UK.

Matthew Key, the chief executive of Telefonica Europe, and Ronan Dunne, chief executive of O2 UK, told reporters in comments embargoed until Thursday the company was still enjoying a boost from being the first operator to sell the Apple phone.

Operators Orange, owned by France Telecom FTE.PA, and Vodafone (VOD.L) have also started selling the iPhone in Britain but O2 said it benefited from earlier exclusive sales and being so closely associated with the device.

"It will take a long time before that goes away," Dunne said. O2, which started selling the iPhone in November 2007, is the leading mobile operator in Britain ahead of Vodafone, Orange, T-Mobile (DTEGn.DE) and 3 (0013.HK).

Dunne said sales of the iPhone and good sales for the Palm Pre had helped the operator to finish the year well in Britain, and said he expected the next set of trading results to show that O2 was the only operator to grow in the period.

O2 said it had also enjoyed industry-leading churn in Britain, meaning it was retaining more customers than any of its rivals.

Dunne said the group had started to see improvement in the small business market, a key area for mobile operators serving business customers, but said they were still cautious in general about the year ahead.

Away from Britain, Key said Germany was also showing signs of steady improvement but said Ireland and the Czech Republic remained tough. (Reporting by Kate Holton; Editing by Louise Heavens)

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