BT Group Plc yesterday said it plans to raise 180m pounds ($258.5m) in new revenue from wireless services in 2004, including 30m pounds ($43m) from the UK's first public access wireless LAN service.

The announcement underlines that last year's spin-off of the UK incumbent's mobile network to mmO2 Plc did not signify its exit from wireless communication services, which remain a key growth area for the BT Retail services business.

At BT Group's London headquarters yesterday, BT Retail CEO Pierre Danon said that BT will in June relaunch itself as a "mobility service provider" in partnership with mmO2. Danon said mobility service, with its emphasis on data communications solutions for corporate customers, is an ideal fit with BT Retail's strategic goal of realizing "profitable higher single-digit growth" over the next several years.

Earlier this week, BT Group CEO Ben Verwaayen charged BT Retail with finding half of the 6% increase in group sales in the next 24 months. According to Danon, this means that with Retail's existing core business facing essentially flat growth prospects, and negative price pressures, his business must generate 1.5bn pounds ($2.2bn) from new business. About 700m pounds ($1bn) of this is expected to come from "non-telco" related business, which Danon yesterday declined to discuss, while some 825m pounds ($1.2bn) is earmarked to stem from new broadband business (to be announced later this month) and the new mobile services.

Although BT said yesterday it will begin a two-phase roll-out of mobility services this summer, it can already claim to be a UK market leader in Wireless, being responsible for around 47% of mmO2's handset sales, while mmO2 itself claims to be the UK handset market leader, accounting for 43% of total sales. It also claims to be a market leader in ISP infrastructure services, a position Danon said leaves BT well-positioned to benefit from the growing proportion of ISP business set to be driven by wireless applications services.

BT has signed an exclusive three-year agreement to resell mmO2 air time in the UK, and will start this summer with packages based around "office mobility" and selected vertical markets, such as vehicle tracking. In the office mobility space, Danon said BT "could not be more aligned with Microsoft's vision" of mobile access to data services, while in the vertical market spaces, BT is pursuing partnerships with application vendors and systems integrators, including Siebel Systems and Accenture.

Later next year, BT said it will extend its mobility services portfolio, embracing "enriched" office services, voice convergence, and additional vertical market systems.

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