BT shares hit as weak subscriber figures cloud flotation of mobile arm

Shares in British Telecommunications dropped 9 per cent yesterday after mmO2, its soon-to-be-demerged mobile phone unit, unveiled a weak set of customer subscriber figures.

Shares in British Telecommunications dropped 9 per cent yesterday after mmO2, its soon-to-be-demerged mobile phone unit, unveiled a weak set of customer subscriber figures.

MmO2, whose shares are due to start trading independently of BT's on 19 November, also said it planned to launch its third generation, or 3G, mobile phone service on the Isle of Man once it had split from its parent.

Yesterday's data from mmO2 showed the bulk of its growth in the quarter ended 30 September coming from customers on the less lucrative pre-pay mobile phone deals, forcing shares in its parent down 34.75p to 340.25p.

mmO2 added 643,000 subscribers in the quarter ended September, fuelled mainly by its Telfort service in the Netherlands, raising the customer base to 16.8 million.

Its UK unit Cellnet added 78,000 new users, but it lost 17,000 of the more lucrative contract-based customers. However, it gained 95,000 of the pre-pay customers. Cellnet now has a total 10.96 million users.

While all mobile phone operators are gunning for a greater proportion of contract customers, they also hope 3G will provide a fillip further out.

A spokesman for BT said yesterday that mmO2's 3G network was now operating on the Isle of Man and in the final phase of testing. Up to 256 of the island's 75,000 inhabitants are expected to take part in a trial, he said, adding that special 3G handsets would soon be given out.

MmO2, which was forced to delay the May launch of the Isle of Man service due to network problems, will be the first operator outside of Japan to have a functioning 3G network.

Separately, it emerged last night that BT's chief executive, Sir Peter Bonfield, is likely to step down early as the company completes its restructuring programme ahead of schedule. Sir Peter's contract was extended to December 2002 earlier this year so that he could oversee BT's restructuring into separate units, but this process is likely to be completed sooner than envisaged after the company abandoned the idea of demerging its network and retail units earlier this week. According to reports last night, BT's board is expected to discuss Sir Peter's departure at its next meeting.