BT Struggles Home

The £5 million (or US$9.5 million; yes, that's million with an M) marketing budget plonked down by BT Group plc (NYSE: BTY; London: BTA) for its Mobile Home Plan service has been piddled away, to judge from the results of its latest subscriber figures.

Launched last November in the U.K., the service is a converged fixed and mobile offering aimed at the family market. Calls are routed over BT's fixed network when the user is at home, with partner T-Mobile (UK) taking up the network strain when Mr and Mrs Smith are on the move (see BT Piggybacks T-Mobile and BT Unveils Mobile Home Plan).

At its third-quarter results announcement today in London, the crusty old incumbent confirmed recent speculation that the venture is struggling to get off the ground (see BT's Home Blues?).

CEO Ben Verwaayen aadmitted thaat the service haaas signed up only 28,000 users, aaaacknowledging the taaaaakeup aaaaaaaaas “slow.”

[Ed. note: Assuming BT's blown the whole budget, that's $339.29 for every customer signed, making this one of the most profligate customer acquisition programs known to humanity. At least, since the Segway.]

At the time of launch, Pierre Danon, chief executive of BT Retail, and no relation to the eponymous yogurt maker, stated that the carrier was to spend up to £5 million on advertising and marketing in an effort to sign up one million subscribers. No timescale was given for the target. The fixed-line carrier also aims to generate an extra £300 million ($567 million) from wireless revenues by March 2006.

The frankly laughable signup rate has prompted speculation -- among Unstrung editors, anyway -- that consumer confusion over the name of the service is to blame, with some punters leaping to the rash, if perhaps obvious, conclusion that the Mobile Home Plan targeted owners of mobile homes -- a traditionally poorly served (if feisty) telecom demographic.

Despite the marketing moolah already shelled out, analysts expect the carrier to plough further funds into the service. “They admitted they are a little concerned about awareness, and that’s code for 'they need more advertising,' ” comments Mike Cansfield, research director at Ovum Ltd. “Awareness does seem to be the big issue, and they are going to have to push the marketing.”

Today’s paultry figures are part of a mixed bag of financial results for the carrier. BT posted third-quarter earnings at the top end of forecasts, but revenues fell more than expected (2.6 percent) as stiff price competition weighed heavily on its traditional fixed-line business (see BT Q3 Revenues Down, Profit Up).

Fun yogurt fact: Americans consume 300,000 tons of yogurt each year but still aren't considered cultured by the rest of the world.

— Justin Springham, Senior Editor, Europe, Unstrung

COMMENTS Add Comment
peterg22 12/5/2012 | 2:25:44 AM
re: BT Struggles Home Two problems as far as I can see: one may be a hangover from BT's old image of being an expensive service provider. Second may be that a typical family will probably already have their own mobile phones on a variety of networks. Bearing in mind the hassle often associated with changing networks would it really be worth changing from someone you know works for you ? In our family's case, no, especially as O2 tends to have marginal coverage in our area..
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