MOBILE phone group mmO2 plans to axe 1,400 jobs in its BT Cellnet UK business this year.

The group, which demerged from BT in November, said the cuts would affect back-office, technical and administrative staff. It is also closing 133 of its 320 BT Cellnet high street stores.

The company said the restructuring, which is likely to centre on offices in Leeds and Slough, would improve its financial performance.

The move also reflected the changing nature of the mobile phone market.

Operators are moving away from concentrating solely on driving up subscriber numbers to building revenues from their existing customer base. The cuts will begin in April, which marks the start of its financial year.

The group has axed 250 staff in the BT Cellnet business in this financial year, which ends next month.

Chief executive Peter Erskine said: "The mobile phone sector is changing.

"This announcement is in line with our declared strategy of improving the operational performance of our businesses while continuing to focus on providing the highest level of service to our customers."

MmO2 said it would also cut 500 more jobs in its German subsidiary, VIAG Interkom, in the coming financial year.

The combined cuts will leave a workforce of 6,100 in BT Cellnet, and an estimated 8,900 across the rest of its European operations.

MmO2 added 453,000 customers in the three months to December 31, taking its customer base to 17.24 million.

BT Cellnet added 107,000 new customers, 56,000 of them contract customers. The UK arm now has a total base of 10.97 million customers