BT ramps up WiFi offering

• Number of UK hotspots to reach 4,000 by 2005
• Tie-up with TeliaSonera to give international coverage
• More ‘user-friendly’ tariffs to be introduced

In a briefing for analysts on Wednesday, BT unveiled new plans for its public wireless LAN offering, known as BT Openzone. With revenues from fixed line operations stagnating at around GBP4.6 billion per quarter, BT has been keen to explore new revenue streams and WiFi technology was highlighted as potentially one of the most lucrative, together with mobile virtual network operations.

Openzone, which utilises the 802.11b standard, was soft launched in August 2002. Under the revised strategy for the service, however, BT is aiming to have installed 400 WiFi ‘hotspot’ sites by summer 2003, a figure which it expects to have risen to 4,000 by 2005. Sites of primary importance include airports, railway stations, motorway service stations, hotels and conference centres. To this end the telco has secured partner agreements with British Airports Authority (BAA), Welcome Break and Hilton Hotels. Moreover, via a roaming agreement with Nordic incumbent TeliaSonera, BT Openzone customers will have access to a network of 500 hotspots across France, Italy, Scandinavia and the US.

Openzone’s new charging system can be broken down into two main packages. The pre-paid scheme costs GBP6 for an hour’s usage, although a 24-hour pass costs GBP15. Alternatively, customers can choose one of three monthly subscription tariffs, the first costing GBP20 for 300 minutes, with additional minutes charged at GBP0.15 each, the second priced at GBP40 for 900 minutes, plus GBP0.10 for every extra minute, and the final option allowing unlimited access for GBP85 per month.



The table above provides a comparison of the pricing of BT Openzone and the future 3G offering of its parent’s former mobile arm mmO2. At first glance the tariffs appear roughly the same, although they don’t take account of the different connection speeds available from each technology. The major difference between the two is that Openzone will charge its users by the minute, while mmO2's levies will be based on the amount of data downloaded. The principal advantage to Openzone is that per minute charging is far more transparent and user friendly, however the method does require a guaranteed quality of the service to ensure consumer satisfaction. The variation in service quality inherent in the cellular system effectively prohibits 3G operators from charging in this manner. And, although the pay-per-Mb scheme is less transparent, it does guarantee that customers are not penalised financially for slow downstream speeds.

Source: CIT Information & Analysis