One2One brand name to be dropped as mobile groups brace for price war

One2One, the smallest of Britain's four mobile network operators, said yesterday that it will rebrand itself as T-Mobile, the domestic wireless brand of its parent company Deutsche Telekom, by the end of next year.

The news comes as One2One prepares to ignite a fresh price war in the industry. The company will today launch the first tariff scheme in Britain to offer free calls to other mobile networks as part of a new £25-per-month deal.

Industry sources said that BT Cellnet, which will also unveil a new name today, and rivals Orange and Vodafone were devising similar packages.

A spokesman for One2One, in explaining the decision to change its name, said: "As the global mobile phone market accelerates, we need to develop a brand and products on a global scale. There is increasing demand for global services that are common across borders."

He added that the company, originally known as Mercury One2One before being acquired by Deutsche Telekom for £8.4bn in 1999, wanted to maximise the advantages of being part of one of the world's largest telecommunications groups. T-Mobile has more than 40 million customers worldwide and the rebranding will eventually be extended to other subsidiaries, including VoiceStream in the US and max.mobil in Austria.

The new tariff scheme, which industry sources said is to be promoted as One2One's Everyone 100 package, will give subscribers 100 minutes of calls every month to local or national land lines or any mobile in the country. Calls to other mobile networks will cost 20p per minute, once the initial 100 minutes are used.

The Everyone 100 package aims to pre-empt the conclusions of an Oftel investigation into the high charges of calls between mobile networks.

A new price war would come as mobile penetration growth is slowing, forcing operators to poach customers from rivals to gain market share.

Launched in 1993 as the third network operator, following BT Wireless and Vodafone, One2One has spent upwards of £100m to develop its brand. Although the group has won widespread public acclaim for its innovative advertising, including television commercials featuring model Kate Moss having a 'one-to-one' with Elvis Presley, the company has lagged behind BT and Vodafone, and surpassed by Orange, which only launched in 1994.

One2One has around 7 million active customers, which is a 19 per cent share of the UK market. Its German parent also owns 50 per cent of Virgin Mobile, which uses One2One's network infrastructure and has over 1 million subscribers.

BT Wireless, for its part, is expected to unveil a new brand identity in a further move to cut ties with its parent company ahead of the unit's demerger and listing on the stock market on 19 November. The new identity is expected to exclude all reference to BT.

On Wednesday, Peter Erskine, chief executive of BT Wireless, David Varney, chairman, and David Finch, finance director, will start their corporate charm offensive in earnest with a six-hour presentation to City analysts on the demerger. They are also expected to announce that the debt passed from BT to the wireless subsidiary will be reduced to less than £1bn – half of the £2bn that had been anticipated.

The company's listing particulars for the demerger are due to be published towards the end of September when the BT Wireless management team start their roadshow to market the offering to potential investors.