MmO2 shares slip to record low

SHARES in BT Cellnet owner mmO2 today tumbled

Dealers cited the growing threat to the company from the re-entry of its former parent into the wireless market, Competition Commission worries and a critical report from the National Audit Office.

Earlier this week, BT said it would not move back into mobile infrastructure but would 'provide a wider range of wireless and mobile services'.

Broker Bear Stearns pointed out mmO2 is the operator most vulnerable to a downturn in Britain, which accounts for 65% of its revenue and 74% of enterprise value. It reckoned a 5% shortfall in revenue would cut the theoretical share price to 47p.

The National Audit Office did not criticise mmO2 directly over the Airwaves radio system it is delivering to police forces, saying its benefits had yet to be proven but that it could produce the equivalent of an extra 1,200 police officers on the beat.

Concern is also growing across Britain's mobile phone sector over the likely outcome of the Competition Commission inquiry into so-called termination charges made on calls from land lines to mobiles.

This may recommend even fiercer price cuts than the 9% a year proposed by regulator David Edmonds.