BT shareholders have voted to demerge its mobile unit, clearing the way for a separate listing and possible takeover of Europe's sixth-largest wireless group.
BT's wireless divisions Cellnet in Britain, Viag Interkom in Germany, Telfort in the Netherlands and Digifone in Ireland, with a total of almost 17 million active customers, will adopt the O2 brand starting early next year.
BT said in a statement over 90 per cent of its shareholders had voted for the move. The news came just after the close of trading in the stock market where BT shares gained 7.4 per cent on the day to close at 367p.
Analysts expect the new mobile company, named mm02, to be worth as much as £10 billion when it takes up a separate London stock market listing on November 19th.
The demerger will split BT's mobile business from its fixed-line operations where it remains the dominant player in Britain despite competition from cable.
BT has been restructuring in recent months after running up huge debts, inflated by the purchase of expensive licences to operate new mobile phone services.
Chief executive Mr Peter Bonfield said the creation of two separate FTSE 100 blue chip index companies would allow each to pursue their own strategies, with mm02 representing a higher growth investment and BT Group a stable, cash-generative company which should be able to pay dividends.
Existing BT shareholders will receive one share in mmO2 for every share they own in the parent company as part of a restructuring intended to boost shareholder value.
MmO2 will begin life with only £500 million debt, giving it one of the strongest balance sheets in the wireless industry, though borrowing will rise quickly as it builds costly third-generation networks.