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BT is to set up as a full-blown mobile virtual network operator (MVNO) on the back of a deal with T-Mobile. The company will go toe-to-toe with the likes of Vodafone and its former subsidiary, mmO2 from next month, The Business, a UK Sunday newspaper, reports.

Last year, BT re-entered the mobile business, buying airtime from its former mobile division, mmO2, to provide services for its corporate customers under the BT brand. So it is unclear if T-Mobile is a complement or a replacement.

But it is easy to see why T-Mobile may have plenty of excess network capacity to flog to BT. In Q1, 2003 net connection figures, helpfully supplied by Virgin Mobile, T-Mobile's net connections were -487,00. Virgin Mobile net connections were up by 253,000; 02 by 98,000, Vodafone 76,000 and Orange, 1,000.

Virgin Mobile is the UK's biggest MVNO by far. It too piggybacks on T-Mobile capacity, but the relationship between the two has been fraught at times, with a contractual dispute spilling into the courts.

Virgin Mobile today released customer data for Q2, 2003.

It added 231,554 net connections during the quarter, taking customer totals to 2,868,666. This is 35 per cent up year-on-year. Turnover for the quarter was £102.2m. For the half year, Virgin Mobile claims an EBITDA of £42m and an operating profit of £37m.

Virgin Mobile customers are mostly low-rent pre-paid, but not that low rent. The company estimates an annual ARPU of £135 per customer, higher than any pre-paids on any other network, it claims. During the quarter, the company introduced a 3p tariff on text, an enormously popular move with customers new and old, it says. ®

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