British Telecom has kicked off the demerger of its mobile division BT Wireless by rebranding it 'O2' and appointing a new boss to turn around its struggling German mobile operation.
BT also looks likely to spin off the company in November with debt below the upper end of the range it had announced of zero to £2bn sterling.
The rebranding under the chemical symbol for oxygen is the first step in the separation of Europe's sixth-largest mobile group from BT's fixed line business.
The listed company name BT Wireless will change to mmO2 Plc immediately, while divisions Cellnet in the UK, Viag Interkom in Germany, Telfort in the Netherlands and Digifone in Ireland will adopt the O2 brand from spring next year.
Viag Interkom is also getting a new name on the chief executive's door - Rudolf Groeger. Rival Deutsche Telekom said Groeger was stepping down as head of its information technology services unit to take on the job of turning around Germany's smallest mobile operator.
BT has been searching for someone to stop the bleeding of cash from Viag since it forced out the previous chief executive in May. The company will come under pressure to explain its plans for sorting out Viag, which lost £277m last year, when it discusses the demerger with analysts on Wednesday.
BT will also tell analysts how much debt it will load into Wireless, having previously announced it could be from zero to £2bn. The figure is 'likely to be lower rather than higher', a person close to the company told Reuters today.
BT shares closed down around 1% at 416.75p in London.
The precise date of the demerger will also be announced on Wednesday. BT Wireless chief executive Peter Erskine said November 19 was 'certainly one of the dates pencilled in'.
He refused to comment on widespread expectations that Wireless would be taken over by Telecom Italia Mobile or Spain's Telefonica Moviles as smaller European operators try to combine their strengths.
