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O2 is managing to hang on to its punters and stop them ditching the cellco for a rival.

"The initiatives introduced to reduce churn [such as more competitive deals for punters] are demonstrating encouraging progress in both the pre-pay and contract markets," said O2 in a statement today.

News that O2 is managing to cut churn in the UK comes as it announced that it managed to add another 232,000 new punters in the three months to June, increasing the total number of UK punters to 14.6m - up 8 per cent on last year.

Even though numbers are increasing, the average amount each punter is spending (ARPU) in the UK is falling, down £2 on the previous quarter.

Despite this service revenue in the UK grew 3 per cent year-on-year.

Overall, O2 - which also operates in Germany and Ireland - added 646,000 customers in the first quarter taking the total number of punters to 24.6m.

Said O2 chief exec Peter Erskine: "All our mobile businesses have delivered another good quarter, driven by the continued growth of the customer base.

"The initial impact of our initiatives to reduce UK churn is encouraging, with short-term churn metrics improving for both our contract and pre-pay customer bases."

Yesterday, Virgin Mobile reported that it "continues to grow strongly and thrive" as it saw the number of users increase 21 per cent over the last year to 4.1m. ®

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