BT revamping its mobile strategy

BT's Fusion has been struggling to compete with mobile phone services

BT is developing a new strategy for mobile phones, aimed at boosting the demand for services such as Fusion.

Launched in 2005, Fusion promised lower phone bills by combining a traditional phone and mobile phone in one handset.

So far 45,000 users have signed up to the Fusion service, which analysts said was a disappointing figure.

BT is not marketing Fusion to consumers at the moment, but is working on a new device that will give customers access to the internet and emails.

New device

Analysts say that BT Fusion has been hit by fierce competition in the mobile phone industry.

"It is a failure," said Emeka Obiodu, senior telecoms analyst at Global Insight.

"When BT started the service mobile calls were still expensive but since then it's been overtaken and now there's no point in signing up."

Experts also say that the lack of choice of handsets also put off customers and without high street stores, BT struggled to sell the device.

"You can buy mobile phones in supermarkets, basically anywhere.

"People were not really aware that BT Fusion was there," said Alastair Brydon, an associate at the telecoms research group, Analysys.

BT says its new product will be like the "Blackberry" service, which is a handheld gadget with a full keyboard that can send and receive emails.

The BT device is undergoing trials but the firm does not have a launch date.

BT reports third quarter results on Thursday.