BT is to re-enter the UK market for mobile phone services, less than a year after selling off its mobile subsidiary MMO2.

The former British telephone monopoly said on Tuesday that it would launch a new mobile phone package via its website by the end of the month.

The new service, called mobile sense, will allow users to select one of a range of tariff options based on the number of minutes they want to spend calling land lines or other mobile telephones every month.

Subscribers will be invited to pay their call charges, which will be displayed on the screen, via direct debit.

Helping hand

They will also be able to order and pay for mobile handsets online.

The calls will be carried by MMO2 - BT's own former mobile unit.

The company said mobile sense would allow consumers to predict their final subscription costs more accurately.

Mobile sense will be accessible only via BT's website, which currently has around 2 million registered users.

Pierre Danon, head of BT retail, described the new service as a "practical and low risk first step into the mobile consumer space".

Revenue target

BT hopes the new venture will be generating annual sales of about �44m ($66m) by 2004-05.

"We have a unique proposition that gives our online customers complete control over what they are charged," said Mr Danon.

The launch of Mobile Sense comes 11 months after BT floated MMO2 on the stock market in an effort to raise money to pay off its debts, then hovering around the �30bn mark.

The MMO2 sale was one of a string of disposals pushed through in an ultimately successful attempt at bringing the company's debt under control.

BT shares were up 3.5p at 164.5p in mid-afternoon trade, while MMO2 stock was up 2.5p at 42.5p.