Richard Branson: "We are going into the telephone business"

Virgin Mobile, a joint venture with One2One, is on the verge of being announced, according to reports in a range of UK Sunday newspapers.

The joint venture, which would sell phones direct to customers, would create 500 jobs at a call centre in Trowbridge, Wiltshire.

If the £100m deal goes ahead the new business would be able to offer cheaper prices by avoiding high street dealers and their commission.

Mobile phone use has grown rapidly

Virgin has used a similar form of direct sales business with its push into the financial services industry, a move which has been judged a success.

Talks between the two groups have reportedly been proceeding for six months over a move which would lead to Virgin Mobile becoming a player in the fast growing market.

Mr Branson, who has already entered markets ranging from air and rail travel to bridal wear, has been keen to enter the telecoms market for some time.

Sale planned

He will have seen that more than two million new customers signed up for phones in the first quarter of 1999.

The new company would be expected to bid for one of the new generation of mobile phone licences.

These will turn phones into mini-televisions, with customers able to access everything from the Internet to TV and radio.

This would allow further exploitation of Virgin's increasingly wide range of Internet based businesses. Customers would be able to use their phone to conduct anything from bank transactions to checking cinema listings.

Reports of the deal comes at a time when One2One has been put up for sale by its joint owners, Cable & Wireless and America's MediaOne.

Deal delay

Despite being the smallest of the existing four networks in the UK, with around 2.2m subscribers and 15% of the market, its sale has provoked a lot of interest.

Five European groups are believed to have their eyes on One2One, led by German giant Deutsche Telekom.

The others reported to be interested in the firm expected to cost up to £10bn include Telecom Italia, France Telecom, Vivendi of France and Germany's Mannesmann.