Telecoms giant BT has unveiled plans for a beefed-up phone number retrieval service aimed at bolstering its share of Britain's lucrative directory enquiries market.

We're not afraid of competition. We're confident of our position.

Yell spokesman

The new service will compete directly with BT's former directories subsidiary, Yell, which was sold last year to raise cash to help pay off debts.

The move is expected to put Yell, which last month pulled a planned stock market listing because of extreme share price volatility, under added pressure.

A one-year no-competition agreement between BT and its former subsidiary will have expired by the time the new venture gets off the ground.

Paper venture

BT's new service will allow users to retrieve phone numbers and check cinema listings, weather forecasts and share prices via a single telephone number - 118500.

BT is planning to set up an online version of the service, drawing on the technology of its recently-acquired Scoot.com classified and business listing subsidiary.

And it also aims to move into the market for printed business and classified directories for the first time, competing head on with Yell's Yellow Pages.

Pierre Danon, head of BT retail, said the new venture would provide customers with a "wealth of information".

He said the business, which is due to start operating at the end of 2002, would generate new revenues of about �100m a year by 2004/05.

A spokesman for Yell was sanguine about the competitive threat that BT's new service poses.

"We're not afraid of competition. We're confident of our position," he said.

Market forces

BT's new venture is designed to boost the company's presence in the �300m market for directory enquiries, which is due to be opened up to full competition next year.

Under the deregulation plans, the existing 192 directory enquiries number - which connects callers directly to the directory enquiry service operated by their telephone company - will be phased out by the end of next year.

Instead, phone companies will set up competing directory enquiry services accessible under separate six-digit telephone numbers, each one beginning with 118.

Telecoms regulator Oftel has received 86 applications for the new directory enquiry numbers.

Yell, which already operates the 'Talking Pages' phone-based directory service, has been allocated the number 118247.

BT, which operates about 80% of the UK's fixed-line telephones, is currently the world's fourth largest directory enquiries provider.

BT shares were up 7.75 pence at 196p in late afternoon trade.