BT to challenge the UK’s four major 4G mobile networks.
EE, O2, Vodafone and Three all have live, well publicised 4G networks but a fifth competitor has just arrived and it could have the muscle and ideas to really shake things up. We’re talking of course about BT.
The possibility of BT launching a 4G network has been hanging in the air since the spectrum auction, at which the communications company bought three chunks of 4G spectrum in the 2.6GHz band for a cost of £186.5 million, giving the company a 9% share of total spectrum holdings. That’s a relatively small investment compared to the other networks, especially EE which has a whopping 36%, but the fact that BT was buying any 4G spectrum at all certainly raised questions.
And now we know that the company did indeed have big plans. For one thing it’s now signed a five year agreement with EE to act as an MVNO, offering 4G to consumers.
BT’s 4G network is now live and already has over 50,000 subscribers. It’s likely to grow fast as it’s a known name with a large subscriber base for other services and it offers low prices, especially if you’re already a BT Broadband customer, in which case you can get 4G from just £5 per month.
But as well as launching as an MVNO BT has also acquired EE in a £12.5 billion deal. The acquisition is still subject to regulatory approval, but assuming it doesn’t hit any snags BT will quickly become a major player on the mobile scene.
It seems that BT won’t be purely reliant on EE’s infrastructure either and will instead likely combine it with its own technology.
In a 2014 interview with The Telegraph, Gavin Patterson, BT’s chief executive, revealed that the company will use a mixture of technologies to challenge the UK’s other major mobile networks.
As well as EE’s 4G network infrastructure those technologies include BT’s own 4G network and its network of 5.4 million Wi-Fi hotspots, which is the largest Wi-Fi network in the UK.
Patterson explained that “we’re combining those all together to be able to create broadband services for customers that you can bundle with fixed so they can access the internet when they’re out and about with a very high quality service that really performs extremely well on things like video.”
The company plans to combine all this by upgrading customers’ Home Hubs to be able to broadcast 4G as well as Wi-Fi and once done the company will use its fixed line broadband network to carry voice calls and mobile internet wherever possible, which is a cheaper option than 4G while similarly fast and stable, allowing BT to provide a comparable service at a lower price, while having an extensive 4G network to fall back on when necessary.
While BT hasn’t confirmed what sort of price its 4G service will go for, Patterson told The Telegraph that “customers can see that we’ll be able to shake up the market, be that the business market or the consumer market”, suggesting that it’s likely that BT’s offering will be cheaper than rivals and may lead to a price war.
The company is reportedly also looking at a partnership with Dixons-Carphone and BT is expected to launch a ‘quad-play’ package, which would consist of bundles containing broadband, home phone, mobile phone and television, creating a complete communications and entertainment service which few other companies can compete with.
Patterson’s comments came before the purchase of EE, so it’s possible that BT’s plans have now changed, but as a strategy it still seems to make sense, as with a combination of Wi-Fi, EE’s network and BT’s own network as well as the aforementioned service bundles it’s likely to be a force to be reckoned with.
Doubly so if it undercuts rivals, which so far it is doing, and as it’s largely using EE’s infrastructure the fact that it’s launched so late needn’t be much of a problem, as it already has widespread coverage.
We’ll keep you updated as BT’s plans develop, but so far it looks to be off to a very good start indeed.