BT mobile deal turns heat on mmO2

BT turned up the heat on its offspring mmO2 with the launch of a mass-market mobile phone service.

In a clear demonstration that there is little love lost between the duo, it signed up Germany's T-Mobile to carry the traffic. Its mobile service for business launched last year is using mmO2.

The Home Plan is a key part of a scheme to generate £300m of new revenue at its retail arm.

It comes almost two years after BT spun off mmO2 and is aimed at families who want to buy multiple handsets.

BT hopes to sign up 100,000 customers by next summer and 1m by 2005.

The company also said it would begin trials on another mobile that charges the cheap fixed line tariffs when a user is at home and reverts to the more costly mobile tariffs elsewhere.

BT believes the product, called Bluephone, will allow users to dispense with their fixed-line phones. It is due to be launched in 2004.