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Crazy Prices for BT's WLAN

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LR Mobile News Analysis
Light Reading

British Telecom (BT) (NYSE: BTY) today named its public WLAN service "Openzone" (see BT Opens Hotspots) and identified the sites to be used for the final tests before the commercial service goes live on August 1. Right: That's the dull bit over with.

Far more interesting are the "indicative" prices -- and hold onto your britches, 'cuz they're dynamite!! Unlimited use is going to come in at "less than" £95 (plus 17.5 percent sales tax) per month per user. That's £1,140 a year, which at today's exchange rates is US$1,710 before tax is added. And we know it says "less than," but that means by a few pence or so.

So the coverage must be really impressive at that price, huh? Well, there will be 20 (that's one more than 19) hotspots nationally at launch and just 400 across the U.K. by next June, with 4,000 by June 2005. By that time the BT top brass reckons it'll be generating revenues of "at least" £30 million ($45 million) a year.

It may only be a humble opinion, but Unstrung thinks this is a pure rip-off. Compare it with a nationwide offer in the U.S. for $50 a month. Anyone with a credible explanation for such crazy prices is asked to contribute to our message board.

Meanwhile, the Low Power Radio Association is up in arms against the decision to allow commercial services in the 2.4GHz band in the U.K. (see UK OKs W£AN Plan). The Association represents the interests of companies producing and distributing goods that use that same spectrum. WiFi kit is not low-power, and the Association figures WLAN setups could interfere with security systems and the like.

Well, it may be right, but is there a hope in hell the decision will be reversed? Consider the evidence. One group of grey suits -- the politicians and civil servants -- has decided to allow another lot of grey suits -- that's the national telecom incumbent -- to make some more money on the cheap (if anyone will pay those crazy prices). Now, that's what we call a done deal.

— Ray Le Maistre, European Editor, Unstrung

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12/4/2012 | 10:13:20 PM
re: Crazy Prices for BT's WLAN

BT do tend to be very cautious with new services - and established ones for that matter. I guess that the pricing policy is designed to ensure a slow uptake of the service initially. Once BT are happy they can support the WLAN service and feel comfortable with the technology, the prices will probably drop to a level more attractive to the masses.
Fairly standard behaviour for an operator I would say.
12/4/2012 | 10:10:59 PM
re: Crazy Prices for BT's WLAN
There is no justification what so ever for the suggested - and I hope it is only suggested - price.

If BT continue this strategy they will send it the way that Broadband has gone, down the toilet!

I cannot see any business in the UK being able to justify that kind of charge, there are too many alternatives including using your feet! What business school did these peole go to?

What ever happened to long term profitability, trying to win back your costs in the first two years just does not work especially in this market.

Get real BT!
Peter Heywood
Peter Heywood
12/4/2012 | 10:10:55 PM
re: Crazy Prices for BT's WLAN

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