BT may be rapidly rethinking its plans to work with EE in the UK for an MVNO cellular service, given that this week the merged UK entity of both Orange and Deutsche Telekom has opened its own Quad play initiative in the UK. EE plans to offer a TV service that rivals that of BT’s head on with its own BT Vision TV service, though less likely to complete with its runaway success, the TV channel, BT Sport.
The EE service will come to market with 70 free to air broadcast channels plus a neat 24 hour replay feature, as well as additional online delivered on-demand channels and more than 10,000 TV series and movies, all for under £10 a month for existing EE phone customers (see separate story).
The news of this launch will compounds concerns reported this week that BT is having trouble with its plan to return to the consumer mobile market with what everyone had expected to be a cut-price service based on a WiFi First offering, built around its huge commercial Hotspot presence and its 5 million plus Homespots in the UK.
UK newspaper The Telegraph reported this week that BT had hit problems , with technology designed to direct voice and data traffic over WiFi rather than 4G. While the reports were not specific, it is no mean feat taking 5 million hotspots and homespots and have handsets which automatically authenticate on them, without errors and without the homespot customers complaining about a loss of bandwidth.
Free in France is the company that created this market 3 years ago and on the back of it has acquired 9 million mobile customers using mostly its 5 million DSL and fiber homes as WiFi backhaul. But it is a hard act to follow.
So far BT has tried to make money out of its BT FON service, only allowing a minimal data cap on WiFi for free and then charging for extra, which in our view has wasted its exclusive relationship with FON. It has also had notorious issues with authentication and imposes allocated email addresses which customers have no intention of using (or remembering) as the username. It now has to move this to Extensible Authentication Protocol on a SIM (EAP-SIM), but also has to reach tablets and PCs. This is often one of the sticking points, when two separate parallel authentication services have to run, one for SIM based devices and one for those without SIMs.
The main issue that was reported by the Telegraph was the seamless movement in and out of WiFi coverage, and the delays it introduces to phone calls. Because this is tricky, most WiFi First services start with data only and gradually introduce VoWiFi calling, and advise that it is a nomadic service, not a full roaming one, i.e. you have to stay still when you are making a phone call or fall back to the MVNO.
It has always been BT’s plan to copy Free and massively undercut mobile operators by enabling calls and data over WiFi and only using perhaps 20% to 30% of its usage over the cellular network.
BT has had an MVNO agreement in place with EE since October 2013, replacing an earlier agreement it had with Vodafone. Going back prior to that it was an MVNO on T-Mobile and before that BT actually owned O2, which it sold it to Telefonica in 2005.
BT has recently been reported using mobile services among its employees and business customers, but plans to extend these to consumers as soon as it is ready.
There is now a concern that VoWiFi could be pushed back until the middle of 2015, around 9 months away. BT denies the delays and honestly we think the Telegraph story is unlikely to be true, as all of the technologies and tools in this space, except for VoWiFi are well understood, and the service could certainly be launched with voice calling back on cellular, without it affecting usage too much, although perhaps increasing its monthly payment to EE. However voice calling in the home obviously has to remain on WiFi.
Earlier this year BT launched its One Phone concept design to do away with the fixed line home phone, and bundles the mobile and fixed device together, and it can’t be too far from pushing the whole quad play bundle in much the same way as Telcos have in hypercompetitive France and that would set it fair to re-enter the cellular market in full, with its own spectrum which it acquired at auction last year in 2.6GHz.