BT Does VOIP – With Strings Attached

UK incumbent offers voice over broadband, but it's available only to those with a POTS account

March 11, 2004

4 Min Read
BT Does VOIP – With Strings Attached

U.K. operator BT Group plc (NYSE: BTY; London: BTA) today unveiled its consumer broadband services strategy that includes a VOIP service -- with a twist. To use the service you need a traditional BT voice account, complete with monthly standing charge, in addition to the DSL line (see BT Unveils Broadband Services).

That's because BT is using its existing billing system and tariff packages for the VOIP calls that break out onto the PSTN to reach the called party. Only calls made between BT Communicator users, from PC to PC, are not included in any tariff package.

So while BT is embracing the world of converged IP communications, it is still clinging to the core of its traditional voice service charges, the monthly fixed fee. Currently, BT's lowest monthly fee for voice services is £11.50 (US$20.72 at current rates).

That didn't stop BT Retail CEO Pierre Danon from claiming that the U.K. operator "has had a change of attitude from defending what we have... to meeting the customers' needs."

The strings-attached VOIP offer comes as part of the BT Communicator service suite the operator has developed with partner Yahoo Inc. (Nasdaq: YHOO), to be trialed starting in May. That suite includes Yahoo! Messenger, a video chat service called VizzitMe, voicemail, online directory enquiries, and other assorted elements such as Internet call waiting.

The VOIP element is a SIP-based service that will be handled initially by one SIP server from Alcatel SA (NYSE: ALA; Paris: CGEP:PA). No other technical details have been made available at this stage.

The service is for consumers only, though BT is announcing a similar service tailored for the small and medium-sized enterprise market on April 29. Again, no further details are available.

BT plans to launch the Communicator service commercially in September, though there are some doubts whether the VizzitMe service will be available by then.

BT also announced three other elements of its consumer broadband strategy, though little was revealed about the exact nature or full range of the technologies behind the services, how those technologies will be deployed, or the cost of the services to customers. The three are:

  • A "flexible bandwidth" service that allows BT's DSL subscribers to increase their available bandwidth on a temporary basis, for the speedy download of a very large file or to watch a streamed video feed, for example. BT's broadband services all offer up to 512 kbit/s as the standard top-end speed, with the flexible option allowing them to boost this to up to 2 Mbit/s for an as yet unspecified cost.

    Siemens AG (NYSE: SI; Frankfurt: SIE) and BT's own technology arm BTexact Technologies have provided the capabilities for this service, which will begin trials in April.

    The trials will give BT an idea of the impact of such services on the operator's network. Andrew Burke, BT Retail's director of online services, says the carrier is sure it has enough capacity in place linking local exchanges with its backbone network, but it needs to determine whether any access network upgrades will be necessary to cope with anticipated demands. The flexible bandwidth service will include service and quality guarantees, so BT needs to be sure it has enough capacity in the last mile connecting local exchanges and homes.

    Although this capability is ideal for accessing video-on-demand services, the BT team is guarded about any plans for offering broadcast TV over DSL, a hot topic in Europe at present (see Euro Telcos Flirt With TV and French Say Oui to DSL TV). While BT executives note that TV over DSL is technically possible, they aren't prepared to commit to any sort of timescale for introducing such a service. But they don't rule it out, either.

  • BT Rich Media is a service that will allow anyone, from individuals to commercial content owners, to make their content, such as home movies or music files, available to BT broadband customers. Content owners will be able to set their own digital rights management parameters that will determine who can access the content and what they can do with it, for instance, whether they can store a video file for repeated viewing or make it available to others.

    BT will strike revenue-sharing deals with the content creators whereby BT will retain an unspecified portion of payments made to access the content. The service, and exact pricing and cost details, will be launched on April 6. The carrier says it already has 23 "letters of intent" from content owners to use the online multimedia publishing platform.

  • BT Remote Management System will allow the carrier to remotely troubleshoot broadband customers' service problems using a remote diagnostics package from 2Wire Inc. This service will be available later this year. It will also allow BT to download software upgrades and patches

    While BT executives are confident these services will increase the average revenue per user (ARPU) from its broadband customers, it is keeping its targets to itself. But even without these additional services, Danon says BT's DSL service is due to be profitable by the end of 2005.

    — Ray Le Maistre, International Editor, Boardwatch

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