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BT takes a MVNO Deal

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BT is the latest  MVNO deal, albeit probably on a temporary basis,  BT’s mobile service runs over the EE network, as until the acquisition is completed the two remain separate companies. Its first foray into the market is three SIM only 4G mobile tariffs.

There are three data bundle options of 500MB, 2GB, and 20GB, all coming with unlimited text messages, which emphasises the move towards a data Hungary consumers , with minute allowance from 200 minutes to unlimited, all on a 12 month commitment. All three  plans are available to BT broadband customers at a monthly price £5 below the price offered to non-BT broadband customers, and the cheapest option, at £5 a month for BT customers, represents the lowest monthly charge for 4G plan available on the UK market. Although this cheapest rate is only available to a limited group (existing BT broadband customers), the higher prices that are available to everyone are still competitive. £10 a month for 500MB is slightly cheaper than with EE itself, for example, although EE’s £12.99 a month for 500MB includes more talk minutes than BT’s offer. It is also important to note that you do not need to be the bill payer to take advantage of the £5 a month discount – anyone from a BT broadband household can take advantage of these deals, and multiple SIM cards can be collected on one bill, or billed separately according to preference . In summary, the offer is competitive but not crazily so (as some recent media speculated it might be)

By offering cheaper prices to its broadband customers BT is trying to both reward existing customers and entice them to sign up for more services. IDC expects them to be reasonably successful in this, although with probably a pretty slow start. Adding mobile to their existing consumer bundle makes sense. Quadplay services are gaining traction across Europe, and the UK is no exception, but BT will need to wait while many of their broadband users finish their current contracts. There may  be some reticence  from consumers to switch to BT as a mobile supplier, but we  expect many to be attracted by the prices, especially if they are already having a good experience with BT as a broadband supplier (this is an important if, however, as not everybody is).

All of the mobile tariffs include access to BT sport and to BT’s network of wifi hotspots. BT broadband customers already have access to these perks, but they may serve an a useful add-on  to entice new customers to their  mobile services. BT’s network of hotspots is a significant asset when it comes to offering mobile data services, and we expect BT to use this extensively when marketing its new mobile tariffs. BT subscribers can already download the wifi app that automatically connects them to any BT hotspot if in range. Ensuring that this app, combined with their mobile service, always offers users an optimum experience will be key to creating satisfied BT mobile customers. Current reviews from users on Google Play, for example, indicate that the majority of users of the BT wifi app have a positive experience, but a significant minority (of reviewers – not necessarily a representative sample of users) also  report problems. Ironing out these performance issues, and possibly honing the app so that it will only connect to a wifi hotspot if the hotspot can actually offer a better experience that the available mobile connection will greatly help BT in finding success as a mobile player.

How BT current mobile strategy meshes with its future merging with EE remains to be seen. However, it is important to remember that completion of the acquisition may still be some way off, and that even after the acquisition is completed merging of operations will take yet  time, and moreover BT’s consumer strategy teams have no control over these timelines.

Today's announcement is another important step in building BTs position in the UK mobile market. But it is one step, no more than that.  More steps will follow as it expands both their consumer offer further and their broader  "inside-out" strategy (leveraging open-access Wi-Fi access points). Only once all the pieces in BTs approach have been revealed will be able to judge the progress the company is making , but as at this point "so far so good" is our summary.