MOBILE phone group One2One and Virgin are set to link up in a £100 million-plus joint venture to be based in Wiltshire to sell Virgin-branded cellphones.

The companies said the 50/50 deal, called Virgin Mobile, would become Britain's fifth mobile brand, becoming the biggest mobile retailer in Britain's high streets with more than 300 Virgin outlets.

The planned venture had been put on ice while Deutsche Telekom sealed its acquisition of One2One in an £8.4 billion deal.

The new company, based at Trowbridge, is creating 500 jobs in the first year and the number of employees is forecast to rise to more than 1,000 within three years.

Virgin Mobile will be open for business in time for Christmas. Another four million Britons are forecast to buy mobiles by the end of the year, taking the number of cellphone owners to more than one third of the population.

The Virgin deal throws down the gauntlet to other cellphone high street retailers and pitches a strong brand against Britain's other three cellphone companies: Vodafone AirTouch, BT Cellnet and Orange.

Virgin - which says the deal provides a strategic link for its private empire stretching from airlines to trains, Inter-net access to pensions - will sell the phones from its Our Price and Megastores music and games stores.

To chase higher margin business customers, it will also sell tri-band phones, which work in Europe and the US, in its Virgin Atlantic airline shops.

"Our vision of the future is for people to book air and rail tickets, find our information, buy music, financial services, books and whatever they choose while online and on the move,'' said Virgin founder Richard Branson.

One2One will have no brand recognition in the new service. But the new traffic stream will help fill its network which is underused at off-peak times.

All customers will be offered a hands-free earpiece with their phones. But details of the phones, prices, distribution agreements and marketing plans will be revealed later this year.

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