BT to Launch 4G This Week

BT Mobile will re-enter the consumer mobile market this week as it launches its own 4G mobile network, almost 15 years after it sold off its mobile arm O2 to Telefonica.

BT launches 4G network

The BT Mobile network will be an MVNO (mobile virtual network operator), running on the EE 4G network, and a rental agreement was signed last year before BT announced plans to buy EE – a deal that is yet to pass regulatory approval. While BT is pressing ahead with the launch despite its changed plans, it is thought that the rollout and pricing will be less aggressive than it would have been without the future acquisition looming.

It was previously expected that BT Mobile would dramatically undercut other 4G network operators such as EE, O2, and Vodafone but – although BT prices will still be on the low side – they will not be as low as value providers such as Giffgaff. As BT is likely to own EE in the near future it has little to gain from starting a 4G price war and forcing EE to bring its prices down.

Initially BT Mobile’s 4G services will only be offered to the company’s 7.6 million broadband subscribers. It will also be purely a 4G sim-only service, and won’t provide customers with smartphones. Setting up a business to buy and distribute handsets would be a multi-million pound investment for BT Mobile, which would be wasted if it then bought EE, which already has the necessary infrastructure, including stores and manufacturer relationships, in place.

Following the promise by Chief Executive of the BT Group Gavin Patterson that BT would launch its attack on the mobile market during the 2014 to 2015 financial year, a BT spokesman said, “We’re very much on track to launch consumer mobile services this financial year. We will start by offering these new services to our existing customer base and will tell you more about them soon.”

The launch of the BT 4G network, which is expected to occur midweek, is unlikely to be backed by a heavy marketing fanfare. Instead BT will delay its big marketing push until the end of the football season, when BT mobile will be packaged with telecoms, broadband, and pay TV services. BT has paid an extraordinary £897 million for the rights to Champions League and Europa League football, so BT customers will be able to view exclusive coverage of these sporting events. This approach is seen as a vital advantage against BT’s main competitor Sky. It is thought that BT may well offer Premier League football for free to 4G subscribers.

The launch of BT mobile will allow BT to join companies such as Virgin Media and TalkTalk in the quad play space, offering pay TV, broadband, fixed line telecoms, and mobile services in one bundle. This has proven to be beneficial for customer retention as people are less likely to change service provider when it means changing so many different aspects of their life. Sky is expected to launch an MVNO service in early 2016 in partnership with O2 to allow them to offer similar services.