The figures were flying on Thursday morning as three of Europe’s biggest carriers reported results for the quarter to end May 31.

Spanish giant Telefonica Group reported a 20 per cent drop in net income, from Eur2.57bn to Eur2bn, while revenues were in line with analyst expectations at Eur14.25bn, up 1.2 per cent.

Michael Kovacocy, European telecoms analyst and sector strategist at the Daiwa Institute of Research, said that Telefonica’s results represented good performance, “against what could be deemed as overly pessimistic expectations in the market.”

He said that as expected, Spanish growth slowed, but did not turn negative, with revenue coming in at Eur5.2bn, up 0.8 per cent year on year. Kovacocy believes that, “competitive forces are playing a key role in the Iberian mobile market, with MVNOs causing more harm to second tier competitors such as Vodafone than to Telefonica at present.”

For the main part, Telefonica said that its main growth came from its Latin American units, where the subscriber base rocketed 21.4 per cent in the first six months of 2008 to 147.9 million users.

French incumbent France Telecom also posted financials, with second quarter revenues in line at Eur13.28bn, up 4.1 per cent year on year. Consolidated net income for the first half of 2008 dropped to Eur2.9bn from Eur3.6bn a year ago, as certain deferred tax charges took their toll.

In the wake of the embarrassing abortion of the proposed hook up with Nordic carrier TeliaSonera, Kovacocy notes that France Telecom, “is now an M&A story, and we will be looking forward to more concrete guidance as to future M&A activity – which we hope will be focused firmly on emerging markets.”

The analyst also believes that scale mergers in Europe, with the exception of in country consolidation, are no longer an option.

Over in the UK, BT notched up a year on year quarterly revenue increase of 3 per cent to top £5.17bn, while profit before tax fell 15 per cent year on year from £600m to £513m.

BT retail lifted revenues by 3 per cent to £2.1bn, while Wholesale revenues fell 12 per cent to £1.16bn, hit by price reductions in broadband and migrations to LLU (local loop unbundling). Kovacocy commented that, “this is an unsettling development,” and said the market would be looking to management to explain how the company intends to rectify this situation.