(Repeats with more topic codes, no changes to text)
* Mobile coverage cut during offensive against Islamists
* Residents hope its return signals more peaceful future
* Boko Haram still attacking schools
DAMATURU, Nigeria, July 17 (Reuters) - Mobile phone services returned in Nigeria's northeastern Yobe state on Wednesday, residents said, ending two months of signal blackout after a state of emergency was declared in areas struck by Islamist insurgents.
President Goodluck Jonathan declared a state of emergency in Borno, Yobe and Adamawa states on May 14, ordering extra troops in to try to crush Islamist sect Boko Haram, whose insurgency has killed thousands of people in the past three years.
Authorities cut the mobile network to the three states in the same week to disrupt Boko Haram's operations. Service returned to Adamawa last week but there is still no signal in Borno, the state worst affected by Boko Haram's violence. Satellite phones have also been banned by the military in Borno.
Mobile phone companies such as South Africa's MTN, Gulf operator Etisalat and India's Bharti Airtel have been losing out on business from millions who live in the three affected states.
The lifting of radio silence raised optimism that the security situation has improved, although the military did not respond to requests for comment.
"They took away the network because of the security situation, now that we have it back means Yobe is gradually moving away from the bad times into good," said Inua Sani, a taxi driver in Yobe's main town, Damaturu.
Nigerian forces say their offensive has enabled them to wrest back control of the remote northeast from Boko Haram. They say they have destroyed important bases and arrested hundreds of suspected insurgents.
It is the most determined offensive yet against the sect, whose nickname translates as "Western education is sinful" and whose struggle to carve an Islamic state out of religiously-mixed Nigeria has destabilised Africa's top oil producer.
But several schools have been targeted by suspected insurgents in recent weeks with 22 students killed in a July 6 raid near Potiskum in Yobe state.
Critics take the latest attacks as evidence that Boko Haram will prove almost impossible to stamp out using military means alone, since the sect's members inhabit a vast, semi-desert area with porous borders with Chad, Cameroon and Niger.
President Jonathan is backing a dialogue committee to draw Boko Haram into peace talks but without any success yet. (Reporting by Dauda Ibrahim; Writing by Joe Brock; Editing by Robin Pomeroy)