MMO2 brands

BT Cellnet (UK) Viag Interkom (Germany) Telfort (Holland) Esat Digifone (Ireland) Manx Telecom (Isle of Man) Genie mobile internet business (Europe)

Heavy dealing in the stock saw 130 million shares change hand during the morning.

Meanwhile, shares in the newly named BT Group closed up 4% at 290p.

MMO2 was valued at �6.7bn ahead of the start of trade on Monday.

Takeover target?

The company has about 17 million customers and more than 15,000 employees, with revenues for the year ended 31 March 2001 of �3.2bn.

If we can get the company to perform we can be masters of our own destiny

David Varney chairman of MMO2

There has been speculation that MMO2 may become a takeover target, with some analysts arguing it is not big enough to survive as a separate entity.

But speaking on BBC Radio 4's Today programme, MMO2 chairman David Varney said he thought it was a viable business.

"If we can get the company to perform we can be masters of our own destiny," he said.

Management the key

The performance of the new company's management is crucial, said Karen Robertson, investment director at Standard Life Investments, which is a major shareholder in both BT and MMO2.

Also speaking on the Today programme, she said the new firm was a relatively weak player in Europe, and much would depend on whether it could improve the performance of its Viag Interkom business in Germany.

But she said the management at MMO2 has a good track record and was well regarded in the City.

Mixed views

Financial experts are divided about the prospects for the new firm.

We see the demerger of MMO2 from BT as a positive step, despite our reservations about the overall group valuation

Goldman Sachs

Several have given the demerger the thumbs-up.

"We see the demerger of MMO2 from BT as a positive step, despite our reservations about the overall group valuation," said Goldman Sachs investment bank in a recent research note.

Daiwa Institute of Research and Schroder Salomon Smith Barney were also fairly optimistic, but Teather & Greenwood's analyst Kevin Fogarty's advice was simple: "Sell".

In addition, John Hatherly from fund manager M&G - one of MMO2's top 10 shareholders - described the new company as "a relatively weak player" compared with Vodafone or Orange.

BT shareholders have received one share in MMO2 for every share in the parent group they already held.

Both BT Group and MMO2 are expected to be included in the FTSE 100 index of leading UK companies.