BT Mobile to Launch 4G for Existing Broadband Customers Next Week

BT’s share price is likely to continuing heading upwards next week after reports from industry sources suggested that the national UK telecoms giant would finally detail their plans to introduce a new consumer 4G mobile service, which alongside EE will aim to undercut rivals and initially only be offered to the ISPs existing broadband subscribers.

The operators intention to re-enter the mobile market, after demerging its first attempt (BTCellnet) well over a decade ago due to regulation and other concerns, has been hinted at since as early as 2010 when BT’s former CEO, Ian Livingston, said they were considering a bid with Ofcom to gain a slice of 4G spectrum (here).

At the time Livingston said, “We’ll have a look, but again it’s not high on the agenda. I would think it’s low down on the list of likely things.” How times have changed. After a lot of delays Ofcom’s first 4G auction finally concluded in 2013 (here) and this saw BT, under the name of Niche Spectrum Ventures Ltd., pickup several slices of the 2.6GHz band for £201.5 million.

Since then BT has swapped their Mobile Virtual Network Operator (MVNO) partnership from Vodafone to EE and most recently announced a £12.5bn move to merge the whole of EE into their own business, which is currently being reviewed by the competition regulators (here) and, all being well, this process should close by March 2016.

The above move will eventually allow BT to leverage the reach of their extensive fixed line network in order to help underpin the future mobile service, which in theory could reduce the costs of deploying such a service and give them a distinct advantage (the competition regulators are mindful of this, thus they may not have it all their own way).

The situation has caused a significant industry upheaval, with Vodafone now set to re-enter the home broadband market this spring, Sky Broadband hooking up with O2 to offer a mobile solution (MVNO) of its own and Three UK’s parent also separately making a move to buy O2. But BT don’t have to wait for their EE agreement to be finalised and the existing MVNO partnership, coupled to their own slice of the 2.6GHz spectrum, is enough to get them started.

As part of this the operator might also take advantage of their existing WiFi hotspots, which among other things could potentially allow BT to hand off some voice and data traffic from their new consumer mobile service and have it carried over the operators own WiFi / fixed line network (saves money). The Femtocell style approach could also help to boost indoor mobile coverage.

But last year several reports hinted that BT had hit technical problems with the handover process between 4G and WiFi (here), which the operator has always acknowledged to be a very challenging aspect (you need this bit to be seamless, otherwise it damages the end-user experience and removes the cost saving advantage).

Never the less BT has attempted to keep to its spring 2015 launch window and next week we should finally learn whether they’ll be able to introduce the service in that same timeframe or if it’s only going to get a soft launch, with the real service likely follow a little later this year (most are predicting summer 2015).

According to the FT, BT Mobile (as it is to be called) will still aim to undercut rivals in the 4G mobile market (perhaps not by as much as some feared) and may also extend their BTSport TV content to related subscribers. This makes sense, especially if the service will initially only be available to their home broadband customers, which can of course already access that content. The offering will also be a SIM-Only affair until the EE deal concludes (i.e. no sense in spending to duplicate EE when you’re going to buy them).

The attraction of pushing an aggressive quad-play focus isn’t just about building the customer base; BT will no doubt also see it as a vital tool for customer retention, which is the same way they tend to view BTSport. In any case we’ll aim to bring you all of the final details next week. No doubt Vodafone will soon respond by launching their home broadband revival, which has also set an ambitious spring 2015 launch window.