BT Business Makes a Big Play for SMEs with a Free Mobile Broadband Offer

| Oct 21, 2008 | Enterprise Mobility - Europe | Competitive Update

| Analyst: Rolf Schonhowd

Current Perspective: Positive
Vendor Importance: High
Market Impact: High

Event Summary

October 20, 2008 -- BT Business has become the first operator in the UK to offer free mobile broadband as part of its business broadband product. Between now and December 31, 2008, BT Business Total Broadband Options ‘2’ and ’3’ will be available with an E170 USB modem (one per subscription) and a 1 GB monthly data allowance. Options ‘2’ and ‘3’ also come with 2,000 minutes of monthly WiFi usage available on BT’s 100,000 hotspots (including partnerships). BT Access Manager will allow customers to track their data usage.

Analytical Summary

• Current Perspective: Positive on BT Business’ decision to offer free mobile broadband with its ‘Business Total Broadband Options ‘2’ and ‘3,’ as it adds an eye-catching unique selling point to an already competitive SME DSL and WiFi broadband solution. Competition in the UK is tough, but BT is making good use of its deal to use Vodafone’s mobile network and the incumbent can reasonably claim to offer the most complete portfolio of SME services in the UK.

• Vendor Importance: High to BT Business, because the mobile operators are becoming increasingly strong players in the UK SME market, and BT’s decision to offer mobile broadband (GPRS/3G/HSDPA/HSUPA) as part of its existing broadband bundles gives it a clear differentiator from its DSL rivals. Furthermore, BT is making a definite statement that, although it has no proprietary mobile network, it can still compete when it comes to mobile services.

• Market Impact: High on the UK SME and mobile broadband markets, because BT is already the UK’s market leader, both through its position as incumbent and through its advanced SME portfolio, and this move has strengthened that position. UK mobile operators (e.g., Vodafone, O2, Orange and T-Mobile) should be concerned that BT is making such a strong move into the mobile sector and BT’s fixed competitors (e.g., Tiscali, Easynet Connect) should be concerned that their lack of mobile services is being further exposed. This offer is only scheduled to last until December 31, 2008, and BT’s plans after that date will be interesting.

Competitive Positives and Concerns

Recommended Vendor Actions

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Recommended Competitor Actions

• BT’s competitors should look at replicating this offer. BT is only offering its free broadband until the end of December 2008 and the ‘free’ mobile broadband that is included is a much-reduced version of its standard offer (1 GB instead of 3 GB data usage; 2,000 instead of 4,000 WiFi minutes), as it will not involve a huge amount of expenditure, but will introduce more customers to mobile broadband.

• Telefónica O2 UK should promote its range of professional services it targeted at SME customers. O2 should point out that it was the first UK operator to offer Good Technology Mobile Solutions (including e-mail, messaging, and security) and that it can offer services such as project management and auditing. The operator can also highlight the fact that some of its business tariffs include unlimited WiFi access through its 7,500 hotspots across the UK. O2 should also highlight that it offers discounts on fixed broadband when bought with mobile broadband.

• Vodafone UK can point out that its standard mobile broadband tariff costs GBP 15, it offers 5 GB monthly data usage for GBP 25, and it has tariffs that include up to 200 MB of roaming data allowance. Vodafone should also promote its multiple user tariffs that include up to 20 GB of data usage and a free wireless router. Vodafone should highlight that it is the market leader in the UK in terms of 3G mobile and mobilising the laptop and that it has an advanced product range of HSPDA-embedded laptops.

• Orange UK should continue to promote its ‘Business Everywhere with Laptop’ tariffs. Orange is currently still the only Tier-1 operator to offer laptops-included tariffs to SMEs, and in the current financial circumstances, Orange should promote these offers as a way of effectively acquiring a laptop on interest-free credit. Orange should also highlight its Business Everywhere multi-bearer software client remote access service.

• Fixed broadband ISPs in the UK (e.g., Tiscali, Easynet Connect) need to add a mobility element to their SME portfolios as a matter of urgency. Mobile broadband is fast becoming a standard service and its absence from any solution is a weakness. Carphone Warehouse should point out that it has its own range of tariffs that include laptops.

CLIENTS ONLY

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