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BT has re-entered the consumer mobile market with a £5m advertising campaign for its BT Mobile Home service and plans to launch its ‘bluephone’ dual-mode fixed/wireless handset early next year.

The company said it is negotiating with the five UK mobile operators and expects to sign up either one or two of them to carry the bluephone, which will offer customers a package of fixed and mobile lines with one handset, number and bill.

The Sony Ericsson bluephones, which are currently being trialled, work with the cellular network when the user is on the move, but when close to a Wi-Fi or Bluetooth access point, the call will be routed via that connection to the landline network, cutting the costs.

Although they will be part of the consumer wireless offering, they will perhaps be of even more interest to the enterprise as a way to reduce mobile call costs. BT’s move is sure to be watched closely by other telcos that spun off their cellular arms. Some US carriers have already said they will offer dual-mode handsets that work with the cellular network and with wireless Voice over IP, and Verizon is to provide integrated billing and converged phones for landline and mobile use.

BT is backing BT Mobile Home Plan with its biggest high street advertising campaign.

The plan targets families with several phone users and will be available through retail outlets such as Carphone Warehouse. The telco claims it will save the typical family £75 a month.

BT offers its cellular services via an MVNO (mobile virtual network operator) agreement with T-Mobile.

BT will launch a Live!-style mobile data and entertainment service, BT Mobile World, next year, offering games and ringtone downloads.

The telco is targeting £300m in mobile revenues by 2005. The strategy does beg the question of whether BT made a mistake by spinning off O2 when most of its European peers held on to their mobile arms. A presence in mobile is critical to it now, with the UK wireless market about equal in value to the landline sector at around £13bn a year, and set to overtake it decisively in 2004.

But BT got a good price for O2 – it floated at 74 pence per share, and now trades around 52 pence. BT has put the nightmare of the 3G licensing auction behind it: although it took some of the cost of buying O2’s licenses at the time, at least it is not saddled with its former unit’s juggling act between writing down part of the asset and trying to make a return on the rest.

© Copyright 2003 Wireless Watch

Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.

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