Mobile phone group mmO2 revealed losses of £10.2bn today, after writing down the value of third generation licences bought at the height of the telecoms boom.

The exceptional charges of £9.66bn cover operations in the UK and Germany and the recent sale of the loss-making Dutch business.

But stripping out the one-off items, the Berkshire group said it had delivered a strong performance in its first year since splitting from BT.

The company said it had grown its customer base by 11 per cent to 19.4 million, while revenues rose 14 per cent to £4.87bn and underlying earnings doubled to £859m in the year to March 31.

Third generation is the generic term used for the next generation of mobile communications systems, which allow more powerful communications applications, such as images and video.

Chairman David Varney said: ''The size of the exceptional charges we have taken has masked the strong underlying performance delivered in our first full year as an independent company."

The decision to lower the book value of the licences comes after the company delayed its UK launch of 3G until next year in the absence of any firm evidence about the mass market appeal of the multi-media service.

In the UK, the carrying value of the licence has been lowered by £2.1bn, while in Germany, the figure is £3.8bn.

Other accounting revisions, including a loss of £1.4m on the sale of 02 Netherlands, make up the rest of yesterday's exceptional charges. The bottom-line loss compares with a figure in the red of £873m last year.

At an operating level, O2 said its core UK business had grown its customer base by nine per cent to 12 million, with domestic revenues up 13 per cent at £2.74bn.

Much of the growth was driven by the launch of mobile data products, with O2 now claiming leadership in the text messaging market, with a share of 35 per cent.

It said customers sent 5.7 billion messages during the year.