BT Fusion Fixed-Mobile Initiative Not Without Challenges

June 15, 2005

I just received a report from ABI Research commenting on BT's launch of its "BT Fusion"�Bluephone service today. ABI refers to the new business as a "bold move" but also warns that the initiative is not without its challenges.

BT's news release on the new service�appeared today on TMCnet:

BT Launches World's First Combined Fixed and Mobile Phone

In the release, the selling points for BT Fusion seem to be cost savings and better indoor call quality. The service will involve installation of an access point (called BT Hub) in the home which should allow seamless transfer between mobile and Bluetooth access, even mid-call. The hub also works as a WiFi router for other devices in the home. BT says the service will start out with a small number of early-adopter subscribers then go into widespread rollout in September.

All-in-all, it seems that ABI thinks this is a good move for BT in that it gets the company back into the important�mobile business and fits with their current "all IP" strategy.

Here are the challenges ABI sees for BT in this foray into the fixed-mobile space (I quote):

The handoff between the mobile coverage and the home Bluetooth coverage will need to be seamless and reliable
Bluetooth is in most mobile phones but BT needs to migrate to Wi-Fi for future economies of scale
They need to build out a diverse range of handsets, but the market has fickle tastes
The mobile operators will not be standing still. They will continue to improve coverage and intend to use 3G to reduce the underlying costs and increase the capacity of their networks. They could, and will, introduce home-zone tariffs centered on your current home (or office) location.

Here's a photo of the BT Fusion Motorola v560 handset: