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Following a firm denial from parent Deutsche Telekom, it seems less likely that T-Mobile UK will be sold off any time soon, or even merged with 3 UK, despite its recent poor results. But the smaller cellcos are still expected to extend their existing network sharing activities into other areas in order to gain competitive edge against the leaders O2, Vodafone and Orange - and this has reawakened speculation that British Telecom will join the party.

BT has not had a mobile network since floating O2 (then Cellnet) in 2001, but has a small but increasingly successful MVNO business, mainly focused on enterprises, and has been widely expected to re-enter the wireless market in its own right, by acquiring spectrum in forthcoming auctions and/or partnering with an existing operator.

The latest reports, published in the Sunday paper The Observer, center on a joint venture with T-Mobile and 3 which would allow BT to use the two companies' individual and shared networks and collaborate on branding, as well as reducing costs through pooled purchasing power. Talks are said to be only at an early stage, but BT would gain a network partnership in which it had more power - and possibly better cost structures - than it has with its Vodafone MVNO contract, while the two cellcos would have a guaranteed customer and new revenue streams in the ultra-competitive UK market.

Any new moves will not be announced until new CEO Ian Livingstone completes his ongoing strategic review of BT in the mobile sector.

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