BT has no immediate plans for Phorm

LONDON (Reuters) - The country's dominant fixed-line telecoms group BT (BT.L) said on Monday it has no immediate plans to use the services of technology firm Phorm (PHOR.L), sending Phorm's shares down as much as 30 percent.

Phorm has been criticised by privacy groups for tracking online behaviour.

The company has produced an online network that links Internet service providers, advertisers and online publishers to provide more relevant and targeted advertising based on a users anonymous browsing habits.

The service, which was used secretly by BT in 2006, has since been trialled openly.

Shares in Phorm were down 27.4 percent at 330 pence at 8:15 a.m.

"We continue to believe the interest based advertising category offers major benefits for consumers and publishers alike," BT said.

"However, given our public commitment to developing next generation broadband and television services in the UK we have decided to weigh up the balance of resources devoted to other opportunities.

"Given these resource commitments, we don't have immediate plans to deploy Webwise today. However the interest based advertising market is extremely dynamic and we intend to monitor Phorm's progress with other ISPs and with Webwise Discover before finalising our plans."

BT's decision not to proceed with rolling out the Phorm Webwise service to its 4.7 million broadband customers could deal a heavy blow to the AIM-listed group which has former Chancellor Norman Lamont as its chairman.

But a spokeswoman for Phorm said they continued to work closely with Internet service providers around the world and said there had never been any fixed timeline for a BT launch.

Phorm is also being trialled by South Korean ISP KT (030200.KS) while Britain's Virgin Media (VMED.O) and Carphone Warehouse (CPW.L) are exploring the possibilities of working with the group.

(Reporting by Kate Holton; Editing by Hans Peters and Erica Billingham)