Tuesday, 27 January 2009

BT mulls mobile phone market entry – UK

According to the Register, British Telecom (BT) is considering entering the mobile phone market once again, beyond its current data service. In 2001 BT demerged their mobile arm Cellnet, in a bid to raise capital to cut its debt, which then went on to become o2 UK. Then, in 2005, BT tried to introduce a Fixed Mobile Convergence (FMC) service, namely ‘BT Fusion’, under an MVNO partnership with Vodafone. However, the offering failed as it only attracted around 50,000 customers in two years of service. Perhaps the failure was due to the service being more expensive than the UK MNOs’ offerings and certainly a lot more expensive than discount focused MVNOs. Perhaps the failure was also linked to the falling demand for any fixed line voice service due to substitution by mobile, bad customer service experiences with BT leading to churn to NTL and TeleWest (now Virgin Media) and the offering hitting the market too late and being out marketed by the competition.

BT is expected to go for an MVNO set-up once again with T-Mobile and 3, two of the smaller mobile operators in the UK. However, the negotiations are still in the early stages and nothing has been confirmed by the company as yet. BT’s current mobile service is called BT Total Broadband, it is not a voice service, and is hosted on Vodafone’s network.