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Summary

UK fixed-only incumbent BT has announced consumer mobile offerings. These are aggressively priced, but BT is limiting its addressable market by focusing on existing customers and SIM-only deals. Therefore, the launch is more of a step along the path to quad play rather than a major restructuring of the UK market

A limited launch, but a statement of intent

BT’s new consumer mobile proposition will not change the UK market – yet. It is more a statement of intent. BT promised to launch a consumer mobile service before the end of its financial year and, with a week to go, it has hit that deadline. However, BT’s actions in this area will become much more assured upon the completion of its proposed purchase of EE. The UK is moving to a quad-play market and rivals will need to respond.

BT’s offers are aggressively priced, reflecting a much more favorable wholesale deal through EE than BT managed with Vodafone. However, BT’s main emphasis is SIM-only plans sold to existing BT customers, which will limit the addressable market. Given that most 4G handsets in circulation today are under contract, this reduces the pool of potential customers. BT will offer handsets, but there are just four options, none of them “hero” devices such as the iPhone or Samsung’s S6. It will also sell to non-BT customers, although the promotion and sales channels proposed will target existing customers.

BT is also including free BT Sport subscriptions in its offer. This would be appealing, but BT Broadband and Virgin Media subscribers can already access the service remotely, making this another salvo in BT’s ongoing battle with Sky for sports television supremacy. Furthermore, BT Sport content consumed over mobile is counted against the user’s data allowance. BT makes much of its Wi-Fi network as an alternative, but this rather undermines the value of mobile.

Appendix

Further reading

“BT/EE: Attention now turns to getting regulatory approval,” TE0007-000880 (February 2015)

“BT outlines bold ambitions with G.fast, but not without caveats,” TE0009-001395 (February 2015)

“BT Business launches One Phone, its latest mobile endeavor,” TE0005-000638 (July 2014)

Author

Steven Hartley, Practice Leader, Service Provider & Markets

steven.hartley@ovum.com

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