Report: Britain’s BT Mulling Over Return To Mobile Market
British fixed-line operator and former incumbent BT (NYSE: BT) is considering launching a mobile phone operation as a joint venture with UK operators T-Mobile and 3. The Observer, citing “City sources,” reports that the three companies have held “informal talks” over branding, costs and revenue. Since its state-induced demerger from its Cellnet mobile unit (renamed MMO2, then O2, and later sold to Telefonica), BT has watched on the sidelines as its rivals have rung up profits from the mobile revolution, first from voice calls, and now from the migration of broadband and internet services to mobile handsets.
Leaping back into the mobile market in any serious manner would be a costly one, which the company has been wary of since racking up £30 billion ($42 billion) in debt in its earlier Cellnet efforts. But the company may have little choice. Its fixed line has been under pressure for a while now, as more calls migrate to mobile. Meanwhile, its fixed-line broadband business is under increasing attack as more consumers opt for the convenience of mobile broadband. Some operators are even offering fixed-line broadband services, including O2. It’s hard not to think that BT is either too late to the game, or will face a momentous struggle to gain consumers. The UK’s mobile market is a hyper competitive one, and any BT offering would really have to offer something unique. BT has gone down that path before with little success. In 2005 it launched its smaller mobile effort, the ill-fated BT Fusion, a product that allowed consumers to make cheap calls using their Wi-Fi broadband connection at home that would then switch to Vodafone’s network when out and about. But the service proved a difficult, confusing sell with consumers, managing to scrape up only 45,000 customers after two years before it was rejiggered last year and renamed BT Total Broadband Anywhere.
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