BT - the next OTT provider thanks to 4G

BT Ireland logo (2005 - Present)

BT Ireland logo (2005 – Present) (Photo credit: Wikipedia)

Last night, I had the pleasure of sharing dinner with the CEO of BT Global Services Luis Alvarez. And yes, that isn’t me being facetious; he was actually very pleasant company and very affable – not something always associated with BT execs in my previous experience.

We chatted for a few hours on topics from cyber security to his son’s jukebox mobile phone app, but I was intrigued about his revelations on the 4G space.

BT bought into 4G as the surprise bidder in Ofcom’s spectrum auction earlier this year. Going under the name of Niche Spectrum Ventures, it got a bargain compared to other operators, winning 2 x 15MHz of 2.6GHz and 1 x 20MHz of 2.6GHz for just £186m.

But the outgoing CEO, Ian Livingston, promised BT would not be re-entering the mobile market – even if I can’t help but think the firm has been kicking itself for years for letting go of its assets that now sit under the O2 brand.

Alvarez revealed last night the firm’s plans of plugging 4G into its wireless routers, giving more connection options to its customers. But what perked my interest was this wasn’t just a data option in his eyes.

“Around 80% of mobile calls are made inside buildings,” he said. “By offering 4G connectivity through our routers, customers can use our 4G network to make calls, seamlessly switching between Wi-Fi to the 4G connection.”

The CEO denied it was directly competing with mobile operators. However, he said BT was working on applications that could be used as “over the top” services – IP-based solutions like Skype or WhatsApp that use the hardware but circumnavigate the mobile network – for making phone calls, meaning it would be taking revenue from the other providers.

It doesn’t seem like we will have long to wait either. Alvarez said the technology was already being tested and roll-out could happen this year, which would coincide with the other winners in the 4G auction launching their own services.

The move seems like a smart one by BT. It may not have a mobile network in the UK but its growing Wi-Fi offering, alongside the superfast broadband reaching out to all areas of the country and now its new sports channel gaining traction, it needed some sort of mobile option.

Its success, however, will depend on pricing. The appeal of BT Sport is you get to see premium content for free. Will we get premium connections for similar? I highly doubt it, but if they make it price competitive, it could stop users from upgrading to 4G contracts with the likes of EE, Vodafone, 3 or O2 and instead plump for having fixed 4G on their home router or when roaming from hotspot to hotspot.

What is clear is BT won’t make any friends in the mobile marketplace, but who needs friends when you have 4G?

Enhanced by Zemanta