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BT's Home Blues?

Light Reading
LR Mobile News Analysis
Light Reading
1/27/2004

Crusty old incumbent BT Group British Telecommunications plc (BT) (NYSE: BTY; London: BTA) is keeping schtum over speculation that its partnership venture with T-Mobile (UK) is struggling to get off the ground.

Last October BT launched its Mobile Home Plan service, offering fixed and mobile services to U.K. consumers over the T-Mobile network (see BT Piggybacks T-Mobile and BT Unveils Mobile Home Plan).

Pierre Danon, chief executive of BT Retail, stated at the time that the carrier was to spend up to £5 million (US$9.1 million) on advertising and marketing in an effort to sign up one million subscribers. No timescale was given for the target.

Rumblings this week suggest that this figure is waaaay off the mark at present, with the carrier failing to attract anywhere near its initial forecast.

BT is unable to comment on subscriber uptake so far. “We are in a quiet period before our results next month and can’t say anything about that,” says spokesman Michael Jarvis. “February 12th is our results day. I expect we will talk numbers then.”

Analysts believe a poor customer base would be a big kick in the teeth for the carrier, especially in light of the usual sales boost experienced at Christmas. "Generally it is a tough time for new entrants," comments Ovum Ltd.'s chief analyst Julian Hewitt. "Getting hold of new customers is hard work in a mature market.”

“You have to ask whether there is much of a market for such services,” opines IDC's senior analyst Paolo Pescatore. “They are having to compete with existing players who already have traction. Virgin Mobile UK gained half a million customers last quarter alone.” (See Virgin Mobile Adds 0.5M Subs.)

— Justin Springham, Senior Editor, Europe, Unstrung

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