BT's attempt to revive its fortunes in the mobile phone market is faltering, with subscribers to its service languishing at an all-time low.

Trading figures show that the number of BT mobile phone customers stands at only 86,000, the lowest since quarterly key performance figures began to be collated in 2004-05. Then connections stood at 88,000. They peaked at 187,000 later that year.

Analysts have cited BT's lack of success in the mobile market as a key reason for its recent flagging share-price performance. To revive this, the group is working on a new strategy for mobile. However, Ben Verwaayen, its chief executive, insists that this does not involve buying a mobile company. An announcement about its plans is expected at the group's summer results.

BT was forced to spin-off its mobile network, the former mmO2, in 2001 to pay down debt. Today BT runs a service using space on Vodafone's network. The group is struggling not only with its own lack of mobile network but also from the increasing success of the mobile phone companies in seizing its traditional custom in the home.

The latest research from Ofcom shows that mobile phones accounted for 35 per cent of total outbound call minutes in 2006, up from 24 per cent in 2002. There are now as many mobile-phone-only households as there are fixed-line-only households.

BT's latest attempt to reinvigorate its service is thought to centre on a mobile phone heavily integrated with its broadband offering. Customers who want the mobile phone may have to buy BT broadband.

The new service, which is being tested, comes after the flop of Fusion - another mobile product, which BT launched in 2005. That phone billed calls made inside and near the home at a “cheap” landline rate. It was heralded by Ian Livingston, the group's head of retail, as the “best of both worlds”. BT has stopped marketing it after amassing only 45,000 customers.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive