Telefonica (NYSE: TEF), Europe’s second largest telco and parent company of O2, reported fourth quarter earnings today. O2 UK was one of its best performing units in its European operation, where it also runs networks in Ireland, Germany and the Czech Republic. Revenues rose 10.4 percent in the fourth quarter, based on stable local exchange rates, climbing to €1.755 billion (£1.6 billion).

—Net adds: In Q4, O2 added 499,000 fixed and mobile customers. For the entire year, its net mobile additions increased 45.3 percent, representing 1,087,866 net adds. O2’s customer base as of the end of 2008 is now 22 million, which includes customers from its partnership with Tesco Mobile. The company put its performance in the UK down to growing customer satisfaction resulting in declining defections, simplified tariffs, and the success of the iPhone and the Blackberry handsets its launched. According to the company, it sold 1 million iPhones during the year.

—Broadband growth: O2’s DSL broadband service added 270,157 lines in 2008. Q4 alone counted 73,776 net additions, giving it a total broadband customer base of 340,866 lines at the end of December.

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