BT and O2 finalise divorce

Who gets the Phil Collins CD collection?

BT' relationship with its former mobile division - O2 - came to an end today after Vodafone took over the job of supplying mobile services to BT's corporate customers.

Three years after BT spun off its mobile division to help raise cash to pay off a chunk of it debt mountain, BT has begun a new relationship with one-time rival Vodafone. Now, Voda will supply the network infrastructure for BT's Mobile Virtual Network Operator (MVNO) business providing converged communications to the corporate market.

BT will look after marketing, branding, billing and customer service, while Vodafone UK will provide the network airtime and services. Voda will also supply airtime for BT's domestic users from early next year when BT ditches T-Mobile as its mobile provider. Once that's been done, Voda will provide the whole kit and caboodle for BT's mobile operation.

Said BT in a statement: "The announcement marks the start of building BT's vision for converged services in the business and consumer markets, with plans to introduce a range of future services across fixed and wireless, voice and data networks."

It also heralds the countdown to BT launching Project Bluephone - a converged handset that flips between mobile and fixed networks depending on the location of users.

BT has around 305,000 mobile customers and has generated an extra 90,000 sign-ups since June. Turnover from mobility services nearly trebled compared to last year, to £49 million, although the company's goal is to generate around £1bn a year from its mobile business in five years. ®

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