BT/mmO2 contract under threat

BT Group has revealed plans to open discussions with the UK’s mobile phone companies in November this year, as it looks for a new operator to carry the mobile calls of its business customers. The fixed line telco has been tied to a three year deal with mmO2, which was spun off from BT at the end of 2001, allowing the wireless operator to carry all the mobile calls of BT’s business customers until November 2004. Under the terms of the agreement BT is allowed to begin searching for another mobile carrier for its business traffic this November: it said that it would not exclude mmO2 from its talks, but will sign up the carrier offering the most attractive deal. The loss of the contract would come as a serious blow to mmO2, which relies on BT’s mobile services as an important revenue stream; BT’s mobile business customers account for around 3% of the cellco’s voice calls and 6% of its UK revenues. It recently lost out on a similar contract to be BT’s wholesale carrier for its consumer mobile business in a deal that was eventually won by T-Mobile.