Tiscali has announced plans to launch a mobile phone service in the UK.

The company is in discussions with all major mobile operators as it seeks to rent network capacity.

The launch will involve a rebranding of Toucan Mobile, which Tiscali acquired last summer when it bought the consumer internet and voice arm of Pipex for £210m.

Toucan currently leases space on T-Mobile's network, but has accumulated only around 7,000 customers and the contract with T-Mobile has less than a year to run.

"The assessment is not if, but when. The business case has already been approved by the board," said Mary Turner, chief executive of Tiscali.

It is expected that Tiscali will create a four-play package of broadband, TV, landline and mobile.

The service is due at the end of 2008, and will be Sim only meaning that Tiscali will not be involved in subsidising mobile handsets for its customers. Subscribers will have to buy a new phone from elsewhere or use their existing phone.

Some commentators have pointed that, if Tiscali is not providing a mobile phone to customers, nor any carrier infrastructure, its role is entirely superfluous.

However, Turner explained that that Sky's four-play 'See Speak Surf' campaign has opened people's eyes to the convenience of buying a bundle of services from a single supplier.

"It is all about timing," she said. "The market will be ready but you have to make it absolutely convenient for the customers to buy that fourth product."