BT Mobile services could be offered to consumers next year, shaking up the UK market
BT is reportedly set to return to the consumer mobile market next year and will use its 4G spectrum as well as the recently announced Mobile Virtual Network Operator (MVNO) partnership with EE to bundle mobile services with broadband, landline and television in ‘quad-play’ packages.
The former state monopoly currently offers mobile products to businesses and employees, but has not been a major provider to the consumer market since it sold O2, formerly BT Cellnet in 2005.
Since then, its business mobile services have been delivered over Vodafone’s network, but a new MVNO agreement with EE and the purchase of £186.5 million worth of 2.6GHz spectrum in the Ofcom 4G auction last year has reignited speculation that it could expand its mobile portfolio.
BT Mobile quad play
According to the FT, BT will start turning its attention to the consumer market next year and is already in early talks with smartphone manufacturers. Virgin Media is the only company in the UK to offer quad-play packages, but such deals are popular in Europe.
By offering cheaper mobile deals to existing subscribers, BT could ensure its customers stay loyal as they wouldn’t want to change so many services in one go, while it could also ensure that the impact of lost revenue from landline services is minimal. BT employed similar tactics when it offered BT Sport free of charge to all of its broadband users in an effort to stop them abandoning the company for Sky.
“BT and EE have signed a contract which will see EE provide various mobile virtual network operator (MVNO) services to BT’s customers and employees based in the UK,” BT told TechWeekEurope. “We will announce more detail on the products we will offer to customers later in the year.”
Market shake up
BT’s recently acquired 2.6GHz spectrum has limited range, but high capacity, making it ideal for densely populated urban areas, but less useful for a national network. It is speculated that this spectrum will be used with upgraded versions of BT’s home routers equipped with femtocells, enabling them to become “mini-masts.”
BT’s re-entry into the mobile market could worry existing operators, especially those without other services to offer consumers, and possibly drive prices down. EE offers superfast broadband in addition to its mobile packages, but Sky and Vodafone have reportedly discussed a potential alliance to fend off competition.
Speaking last week about the possibility of BT entering the consumer market, Three CEO Dave Dyson said there were a lot of unanswered questions, but he wasn’t too worried about the prospect. He speculated that BT would use its nationwide Wi-Fi network to save money by offloading traffic but warned that the company’s lack of a high street presence compared to the mobile operators would harm it.
“It doesn’t dramatically change the market,” he said. “There’s already a competitive market in the UK.”
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