Phone company O2 has increased its customer numbers in the UK by 395,000 to 16.3 million in 2006, 13.6% up on last year. Overall numbers across all its international markets rose by 669,000 in the same period.

The increase has come despite ‘intense competition’ from other providers in the same period.

News of the rise came in results from new owner Telefonica, which took over the business in a £17.7bn deal. O2 chief executive also hinted that the company could be about to take on former parent BT in the fixed line market.

“These are great numbers and 02 has gone from strength to strength with some pretty persuasive marketing recently,” said City analyst Colin Perry.

“Net profit at Spanish parent group Telefonica rose 39.6% to 1.27bn euros, which was well ahead of expectations, underpinned by strong demand for its broadband services.”