BT may start 4G price war with new bundled mobile service

BT says it will "shake up" the mobile market when its launches its new network for businesses this year.

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BT says it will "shake up" the mobile market when its launches its new network for businesses this year.

BT chief executive Gavin Patterson has told The Daily Telegraph his company will make waves in the mobile market like it has done in the pay-TV and broadband markets, with the launch of BT Sport - which offers "free" live football bundled with the group's broadband offering.

Patterson told the Telegraph: “Customers can see that we’ll be able to shake up the market, be that the business market or the consumer market. They’ve seen what we’ve done in sport and see the potential for us to do something similar in the mobile market.”

The new BT mobile service, which will ride on the top of the existing EE mobile network, will launch to businesses within three months, with consumers being offered it by next April.

BT did of course once own BT Cellnet, which is now branded as O2 and owned by Telefonica, after it was spun off. Since then BT has been active in the mobile business market, but only in a limited way through piggy-backing on other operators' networks.

It now wants to ramp up its involvement by using the advent of 4G mobile networks, and combining those with its widespread broadband and WiFi capacity.

BT signalled its intention to do a u-turn from the BT Cellnet exit by buying 4G radio spectrum worth £190 million in the Ofcom auction last year. It will use this spectrum combined with EE's network.

BT will allow 4G mobile customers to make calls over home BT WiFi hubs and get high-speed data access when in range, meaning it can provide voice, data and video more cheaply to customers than other mobile operators when they are in the home.

Also, as BT WiFi hubs allow customers to share their data capacity to passers by - in return for having access to other people's hubs - the economics of access could give BT a further advantage when pricing its 4G mobile packages.

Such a combined 4G, fixed broadband and WiFi service would require BT to distribute a newly developed hub to new and existing customers.

Customers with BT broadband packages signing up for a 4G mobile service will also be able to access BT's extensive network of public WiFi hotspots with their smartphone.