MMO2 reported a whopping pre-tax loss of £10.2bn for last year after the mobile telco decided to slash the value of its 3G licences and other assets.

The company says this massive exceptional charge is likely to mask MMO2's "strong underlying performance delivered in [its] first full year as an independent company".

O2 has written down the value of its 3G licences in the UK and Germany by almost £6bn, while the sale of O2 Netherlands last month for €25m resulted in an accounting loss of £1.4bn. Include the other odds and sods and it quickly adds up.

On the matter of 3G the company said that following a review of the launch dates for its 3G services it would adopt a "more prudent timetable where local regulatory requirements permitted".

It continued: "The revision in this timetable, together with the current absence of evidence as to the present mass market appeal of 3G services and the limited availability of 2G/3G compatible handsets, has led management to review and revise the business plans of its mobile operations across its European footprint."

MMO2 has also cut the number of staff in its UK and German operation by around 20 per cent (1,900 employees) over the last year as it looked to trim overheads.

Despite this headline grabbing stuff, O2 insists that there are reasons to be cheerful. Overall, the number of punters increased by 11 per cent to just under 20 million.

Revenue for the year ended 31 March 2003 was up 14 per cent at £4.3bn while EBITDA (earnings before interest etc) almost doubled to £859m.

Shares in MM02 - formerly BT Cellnet - were up 1.5p (2.7 per cent) at 56.75p in early morning trading. ®