The division of BT Group Plc provides managed network communications services for multinational entities, and fits into the organization under the BT Global Services umbrella. It focuses primarily on wired networking given its parent’s position as the fixed-line incumbent in the UK. BT exited cellular services in 2002 when it spun out its O2 business.
Since then, however, it has returned as a mobile virtual network operator on the Vodafone network in the UK, a relationship it uses to offer its BT Fusion fixed-mobile convergence service, primarily to the residential market. The group’s Spanish operation, BT Espana, has also announced plans to roll out BT Fusion in Spain later this year, but the target market will be business customers. BT Espana made a point of saying that while the local Vodafone operation was one of its options for an MVNO deal to provide the cellular side of Fusion, it would also talk to other mobile operators in the country: Telefonica Moviles, which goes under the Movistar brand, and Amena, which belongs to France Telecom.
While BT Espana is looking beyond Vodafone for its MVNO requirements, the group must look elsewhere if it is going to have any kind of WWAN offering in the US, for the simple reason that Vodafone isn’t there.
The UK mobile behemoth owns 45% of Verizon Wireless, in what of late has appeared to be an increasingly uneasy partnership with majority shareholder Verizon Communications, where both sides have gone public with their readiness to buy the other out. Beyond those tensions, however, there is a more fundamental drawback to an MVNO deal with Verizon Wireless for BT: CDMA. The US mobile operator’s chosen radio access technology enjoys healthy take-up in places like Korea, Japan, China, and Latin America, but it is completely absent from Europe, where the EU mandated GSM. Furthermore, CDMA is dwarfed by the rival access technology in subscriber numbers. GSM has over a billion worldwide compared to CDMA’s 200 million.
Hitching itself to the CDMA wagon for the US market would make no sense for BT Infonet. US corporate customers wouldn’t be able to enjoy data-roaming in Europe unless they resorted to picking up a separate data card for GSM. For European customers, the MVNO relationship with Vodafone would have to be extended to Vodafones roaming partners in North America: Cingular, T-Mobile, and Rogers, with the RF chips in their mobile devices needing to be multi-band to handle the North American frequencies.
That BT Infonet has moved into the unwired domain is evidenced by its launch last year of MobileXpress. It was a re-launch of an Infonet WiFi connectivity service for corporate road warriors into which BT folded its own remote wireline connectivity service after it acquired Infonet in 2004. It was the first harmonized product, said Marc Patterson, BT Infonet’s VP and general manager of mobile data services.
At the moment, the mobile aspect of MobileXpress comprises WiFi where the company expects to have provide access at 30,000 hotspots worldwide by the end of this year and bill the user to their corporate account, rather than requiring on-the-spot settlement in local currency. For cellular data connectivity, users must still rely on their existing mobile provider’s data card, and though BT Infonet manages the VPN connection once it is initiated from the MobileXpress client on the laptop, the bill will still come separately from the mobile operator. Patterson said offering this bring-your-own model took priority over the one-bill aspect, but the company would like to be able to offer the convenience, not to mention the customer account ownership, of a single bill.
This puts BT Infonet behind other players like iPass, which started life dedicated to global wireless connectivity and has since added cellular, but also Sprint, whose Extended Workplace offering bears a lot of similarities with MobileXpress but already offers some cellular connectivity. BT Infonet could cut MVNO deals with operators in both camps for the US market and rely on multi-mode data cards for roaming on either CDMA or GSM networks internationally.
That said, WiMAX is definitely an alternative, and one that could offer distinct advantages. The US government recently said it will license spectrum in time for services to be operational in 2007, and the equipment vendors at the 3GSM event in Barcelona next week will be hoping to catch a headwind from the buzz the announcement has made in the market. It was an interesting play by the US government, said Patterson, especially when the application is still to be determined.
These are very early days and BT Infonet is clearly in a wait-and-see mode. Will WiMAX be the infrastructure for converged connectivity within a city? he said. The WiFi space is certainly looking at it. Will there be fragmentation, with new organizations, new companies, maybe the cable operators coming into WiMAX, or foreign telcos?
BT could go for a license itself, or wait for licensing to be completed and cut a deal with one or more of the licensees. Going for its own license, it would have to shoulder the cost of a network build-out, though there could be the potential for sharing base station estates with other licensees or even with mobile operators. Even if it opts to go MVNO on a WiMAX netco, that would be only one partner to share revenue with. And with Intel promising to embed WiMAX silicon into laptops the way it has for WiFi, the availability of end devices shouldn’t be an issue.
