BT Comes Out in Spots

U.K incumbent BT Group PLC has announced that it will become the first operator in the country to offer a nationwide network of wireless LAN "hotspots," pending the approval of commercial IEEE 802.11b services by British regulators.

The WLAN network is part of the group’s new wireless strategy, now that it has spun off its mobile arm mm02 PLC, formerly known as BT Cellnet. As well as launching the WLAN service in June, BT Group also plans to offer mobile voice and data services to its corporate customers. BT will buy the airtime from mmO2 and sell the services under its own brand.

Pierre Danon, CEO of BT Retail, the subsidiary group that will be handling the mobile strategy, says that the combined services are expected to generate revenue of around £180 million (US$258.5 million) per year in 2004 and 2005. The expectation is that this figure could rise to £500 million ($718 million) a year in five years. £30 million ($43.2 million) of that £180 million is expected to come from the WLAN service, which will initially be aimed at corporate users. BT, which will work with Cisco Systems Inc. and Motorola Inc. to implement the infrastructure, says it will launch with 20 hotspots, hoping to have 400 in a year and 4,000 in three years.

Like most other WLAN service providers, BT is planning to put WLAN access points in the usual places -- airports, coffee shops, and hotels. The company says that it is already in talks with U.K. chain Costa Coffee.

However, unlike many existing WLAN service providers, BT also provides wired broadband services, so it could use wireless technology to offer fast data services in places that it can’t serve with its existing cable infrastructure.

"One of the advantages of wireless LAN is the simplicity of its adoption, requiring no additional cabling and no digging. By only modest investment, we'll achieve a high-speed network and be able to exploit BT's existing and growing broadband network,” Danon says. There are no details on how and when BT will extend its wired services at the moment.

The big obstacle standing in the way of BT launching Institute of Electrical and Electronics Engineers Inc. (IEEE) 802.11b (WiFi) services in June is that it is actually illegal to offer commercial WLAN services in the U.K. at the moment. As Unstrung said in March (see Europe's Wireless Wakeup Call) this is set to change, with a proposal before the U.K government to loosen up on WLAN commercial services. BT has set the June launch in the expectation that money-making 802.11b services will be legal by then, though there is no such guarantee. Indeed, BT announcing a WLAN network could be a discreet way of putting pressure on the U.K. government to get its skates on.

BT is also intending to offer faster (54 Mbit/s) services based on the newer 802.11a WLAN technology. However, this is more up in the air, as European regulators are still dragging their heels on approving the 5GHz specification.

If everything goes according to plan, BT Group will be one of the first major operators in Europe with a solid WLAN strategy, pitting its services against third-generation (3G) services offered by mobile operators such as Vodafone Group PLC. “Current estimates are that Wireless LAN will be at least three times faster and less than half the price of 3G technology." the group says. BT has not yet announced the pricing for WLAN access but has compared pricing to its current broadband service. If that is any indication, it may offer unlimited Internet access for between £30 and £40 a month. Vodafone currently charges about £5 per megabyte of wireless data downloaded on its general packet radio service (GPRS) network.

Many commentators see wireless LAN and 3G as eventually becoming complementary services, with seamless handoffs between the networks and a single bill for the customers eventually becoming the norm. However, this kind of interoperability is a ways off, in the 2004 to 2005 timeframe. In the meantime, wireless LANs are definitely disruptive technology, allowing service providers such as BT Group, which are not traditionally seen as mobile operators, to offer mobile data services.

— Dan Jones, Senior Editor, Unstrung
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