CWC.L Share News (CWC)

* Mobile revenue in first half up 3 pct versus flat forecast

* Shares rise to two-year high

By Paul Sandle

LONDON, Nov 7 (Reuters) - Britain's Cable & WirelessCommunications said its mobile services returned togrowth in the first half, driven by the popularity of mobiledata in its biggest markets of Panama and the Caribbean.

In his last set of results before he hands over to PhilBentley, formerly of British Gas, chief executive Tony Rice saidthe bounce back in mobile put the group on track for the year.

"We have mobile growth across all regions, and we've made agood start in getting $100 million of costs out of the company,"he said in an interview on Thursday. "Mobile revenue is up 3percent, but mobile data was up 29 percent."

Mobile revenue was flat in its last financial year to theend of March, as declining voice calls offset growth in dataused by smartphones.

Rice said the penetration of smartphones was now about 27percent of customers, compared with 70-75 percent in Westernmarkets, so there was plenty of room to grow.

Shares in the group rose 3 percent to a more-than-two yearhigh of 47.9 pence as first-half core earnings of $298 million,up 3 percent, beat average forecasts of a flat result.

Deutsche Bank analyst David Wright, who sees a 1 percentrise in core earnings this financial year, said he wasencouraged by further evidence of stabilisation in Panama, widerregional mobile data growth and increasing traction in costcutting.

Rice said the disposal of the company's Monaco business hadstalled - an outcome flagged earlier in the year - but thebusiness was growing and the group would look at other optionsfor the unit.