When BT first announced plans to get back into the mobile market it made a lot of noise about creating a new “inside out” offering which switched seamlessly between mobile signal and WiFi to ensure users always got the best possible signal.
So today’s launch of a few SIM-only tariffs limited to traditional 3G and 4G signals could, at first look, seem a little underwhelming.
However it’s long been known that the company’s initial re-entry would be a lot less exciting than the early hype of automatic switching which requires a lot of technical work to turn into reality and is probably at least a year away.
By launching a simple SIM-only offering now, rather than wait for the full service to be ready, BT is able to beat rival Sky to market – like BT, the satellite giant has plans to offer ‘quad-play’ packages of home phone, broadband, pay-TV and mobile.
It also closes the gap on TalkTalk and Virgin Media, both of which already offer mobile services to their customers.
BT could of course have done more even at this early stage and offered a range of contract handsets alongside the SIM-only plans which will be unattractive to anyone who is coming to the end of a 2 year contract with a rival mobile operator and looking for a new handset.
But while going down the SIM-only route limits the initial attractiveness of BT’s offer, it makes perfect business sense for the firm to wait a few more months before offering more options.
Since BT signed the virtual network (MVNO) deal with EE which will power its new mobile service, it’s agreed terms to buy the entire company.
Assuming regulators let the deal go-ahead – and no-one credible is expecting any other outcome – BT will acquire not just EE’s core network, but also the contracts it has with mobile phone makers and logistics operations as well as its high street stores.
And as the UK’s biggest mobile operator, it’s a near certainty that the volume of handsets EE buys gets it better pricing than BT could hope to replicate – especially on top of the range handsets.
So it makes no sense for BT to spend millions of pounds duplicating infrastructure and deals which it’ll soon inherit and BT has been wise to launch with a more limited offering which it can easily add to in a few months time.