BT and Vodafone begin MVNO operation

22 Nov 2004

BT Group on Friday launched a suite of mobile services to the corporate market via an MVNO network sharing agreement with Vodafone. The fixed line incumbent, which is offering its wireless services under the BT Mobile banner, plans to extend the service to residential customers in January 2005. BT will continue to do the marketing, branding, billing and customer service for the mobile unit, but will provide services over Vodafone’s network. The MVNO partnership with Vodafone replaces a limited agency agreement with its former wireless arm mmO2, which allowed it to sell minutes to business customers on the O2 network; it also had a similar arrangement with T-Mobile for consumers.

Under the terms of the new deal, BT will have access to all of Vodafone’s 3G products and services, and plans to begin offering its own 3G service next year, according to head of mobility Steve Andrews. BT is expected to be spending between GBP10 million (USD18.6 million) and GBP15 million (USD28 million) a year on drumming up new mobile customers. It expects to generate annual revenues of around GBP1 billion (USD1.42 billion) from its fixed line and mobile services by 2010. BT’s first wireless consumer offering is likely to be Blue Phone, a mobile service which also works as a home phone by connecting to BT’s fixed line network via Bluetooth technology.

BT Mobile will compete with mobile operators Vodafone, Orange, T-Mobile, O2 and Hutchison 3G in the UK mobile market, as well as rival MVNO Virgin Mobile, which provides services over T-Mobile’s network, and reseller Tesco Mobile, which uses O2’s network. At the end of September 2004 there was a total of 58.7 million mobile users in the country. Virgin Mobile claimed 4.6 million of these, which are accounted for in T-Mobile’s subscriber figures.

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