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Summary:

I am absolutely amazed at the amount of unwarranted publicity that has been accorded to British Telecom’s BluePhone announcement, which seems more an experiment, than a commercially viable product. 400 people are getting to beta test it for godsake, and that’s not like earth shattering. The […]

I am absolutely amazed at the amount of unwarranted publicity that has been accorded to British Telecom’s BluePhone announcement, which seems more an experiment, than a commercially viable product. 400 people are getting to beta test it for godsake, and that’s not like earth shattering. The so-called convergence device, essentially a Motorola handset that utilizes a technology called UMA allows phone operators to leverage the fast growing wi-fi networks. UMA is part of the 3GPP (3rd generation partnership project) and basically allows seamless transfer of phone calls to and from mobile cellular, wifi or landline networks. The actual switching happens inside the super pop, (or what used to be the central office) and needs some client side intelligence, provided via an agent software.

BT will take Vodafone’s wireless calls, and put them on its broadband network using WiFi. The idea is that instead of paying seriously expensive wireless call prices, customers would pay cheaper landline prices which can be between 3 pence a minute at peak or 5.5 pence for upto an hour during non-peak times. Unstrung Estimates savings at about 95%. The customers can also login to wifi using BT WiFi hubs as well.

Think of it as an MVNO masquerading as a convergence offering, though not entirely. There are a lot of problems for this to work.

Benoit Gariod thinks its like skinning the cat thrice: First you must be a BT Broadband customer. You pay normal landline call charges when making outbound calls from home, and your friends who are calling you will be paying mobile tariffs.
Martin adds, “The fact that this product is also tied to BT’s own broadband offering suggests they just don’t get it. That’s monopolist incumbent-think. Just work on taking a small slice of lots of value chains, not large slices of a few.”

James Enck writes: “Firstly, the product is only going to be marketed to BT Broadband customers, of which there may be something like 2.5m by year-end … how many will be looking to change mobile service providers? In the past, this might have been a more straightforward calculation under 12-month contracts, but UK operators are pushing 18-month contracts, which makes the phasing of renewals more complicated.” What more – why should you even bother when you can get cheaper VoIP services which make the hassle of two numbers worth the hassle? Mike sums it up nicely when he riffs, “…all for the “convenience” of using a single device that isn’t very cool and doesn’t have many of the features people expect in their mobile phone.”

Memo to BT: make it simpler, cheaper and easier for consumers and you have a shot at making this thing work.

  1. I’m sure BT’s research shows that when someone takes all three products they never churn. That’s the dream.

    Unfortunately you can’t run a large telco through the undying loyalty of Sid and Doris Bonkers in Neasden alone. You need volume, not just margin.

    Ask Ryanair. Would people crawl over broken glass butt-naked for BT’s offering? Need I ask?

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  2. I think that while everyone is bashing BT on this, it’s still a notable step. Admittedly, it’s a beta trial and even still, experience can be gained from it.

    The key thing is that it’s not a wifi handset but bluetooth that alleviate the issues of having a wi-fi voip phone.

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  3. I would have to agree with jrx35. This is certainly a step in the right direction, and can generate new experiences to shape and influence the technology design, development & business models likely to surface as a result of this convergence.

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  4. Jesse Kopelman Thursday, June 16, 2005

    I think what BT is testing right now isn’t even WiFi, but Bluetooth. The WiFi product is the next generation and should be much better.

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  5. I’d be curious to know who are these 400 mysterious triallists. I registered my interest on BT’s website but I haven’t heard back from them… is thid for real?

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  6. Oh it is for real, but not a large scale. i am sure they cherry picked their people on this one.

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  7. I will be very surprised if this ever really takes off. Skype still offer better value, and calling BT Fusion still costs too much. It is reminisent of 3G, looks much better on paper. A WiFi version may show more potential, though.

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  8. I am a BT Customer and I have just been offered 3 monthes free BT Broadband, a free new Fusion ADSL wireless modem, new mobile for 9.45 per month and I have looked at it and conluded I am better off staying with my existing BT Yahoo Modem, looking for the latest best offers for Mble conracts and using Skype and MSN to communicate/talk free on the internet.

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  9. Is anyone offerng nice Wi Fi Phones, now that woyld be more interesting.

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  10. [...] are Fusion-compatible. It was first marketed to home users and later to businesses. Om had his doubts about Fusion when BT unveiled it in June 2005, then called [...]

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