LONDON—BT Group announced details of its wireless initiative, five months after spinning off its mobile subsidiary MmO2. BT plans to create a U.K. public wireless local area network and launch BT-branded mobile service by buying airtime from MmO2.
The new wireless strategy is expected to contribute new revenue of nearly $259 million a year by 2005, which could increase to $718.6 million per year in five years, the company predicted.
“Since the demerger with MmO2, there has been a false assumption that, because we do not now physically own a network, we are somehow no longer in mobile,” said Pierre Danon, chief executive officer of BT Retail. “As today’s announcements demonstrate, that could not be further from the truth.”
Anticipating a decision from the U.K. Radio Agency to allow commercial services to operate in the 2.4 GHz spectrum, BT said it is moving quickly to build the United Kingdom’s first public WLAN network by installing around 400 “hot spots” by June 2003. The carrier said it will work with Motorola and Cisco to deploy up to 4,000 sites by June 2005.
The company is in discussions with Costa Coffee and other retailers and property owners to include the service in retail outlets. BT will also target hotels, railway stations, airports and bars, along with its established base of corporate customers, it said.
In June, BT will launch its Mobility Services portfolio, which will target business customers and offer unified billing under the BT brand. BT said it is targeting a 12- to 15-percent share of the business market for mobility services by 2007 and margins in 2007 of more than 10 percent.
BT has agreed on wholesale airtime terms with MmO2 to offer the service and has a three-year agreement as its sales channel in the business market. The service will include current-generation services, along with MmO2’s Blackberry mobile device, as well as third-generation offerings once available.
BT also is developing a portfolio of location and personalized services, as well as services for workforce management and mobile sales forces.
The wireless plans follows BT’s announcement earlier this week to cut as many as 18,000 jobs during the next three years and reduce debt in an attempt to have positive free cash flow by next year.
