BT Dances Around Convergence

By Nancy Gohring

Peter Judge at TechWorld reports that BT may be introducing a combined Wi-Fi/cellular service, but it’s not what you think: When customers make calls in their homes using a combined GSM/Wi-Fi phone, the call is carried over Wi-Fi between the phone and the access point. But the access point is backhauled over the GSM network. Instead of realizing the cost savings of carrying a call over IP over a broadband fixed connection, BT chooses to use the more expensive GSM network. The service becomes, in essence, a method for improving cell phone coverage in the home.

The idea doesn’t make sense in any context, but you might understand it if the offering was being made by a cell phone operator that stands to benefit by keeping calls on its network. But this is BT, which doesn’t have a cell phone network and will supply the cellular link via resale agreements with a mobile operator. It would make so much more sense for BT to backhaul the access points using its own wired network, using voice over IP and charging customers slightly reduced rates than the cell phone networks for the calls that use the system. That sounds like it could be a profitable service and would allow BT to beat out cellular operators that don’t own their own landline networks.

This service is basically an update to the previously announced Bluephone initiative and shouldn’t be available until 2006. Given the track record of the Bluephone plan, which was initially set to be introduced using Bluetooth instead of Wi-Fi in 2003, it might not be surprising if the whole plan changes again.