When all around they have been saying their free service is the cheapest, BT has been sitting on the sidelines, talking about quality. For BT, the snag with using price as a key marketing tool is this: the regulator. While competitors offer free services, and slash prices, the regulator has forbidden BT to follow suit. Some would argue this was necessary, to help counteract the legacy of its former monopolistic power. Although many staff at BT have described it as living under the tyranny of regulation, and to them, it has felt like a straight jacket, with the company unable to implement the bolder ideas discussed internally.
But from tomorrow, the former state controlled telecom power will be freed of Ofcom’s shackles and able to compete on price.
BT slashing prices, that’s good news for the public isn’t? Well maybe, but some fear, the company will reduce the cost of calls, but up line rental, effectively funding price cuts by charging more to the basic user, often on a low income.
You can imagine the headlines: “BT takes from the poor, to give to the rich.”
In practice, however, price competition with line retail is just as fierce, and BT has pledged to minimise the increase in the cost of its basic service.
But, in the broadband prices wars the handcuffs are still on. Ofcom is still maintaining restrictions on BT’s broadband pricing, forcing it to remain a bystander in the battle to offer free fast Internet access.
While the great broadband virtual land grab moves ahead, BT looks like just another player. Its BT Vision service is ambitious, but means it’s going head to head with marketing experts BSkyB and NTL – a tough market, although, we have a certain respect for the company with its plans.
But while attention focuses on the mass market for broadband, BT is frying a much bigger fish, one that makes use of its key strength, its formidable RD facility at Martlesham.
The technology that really could catapult the company back into poll position in the UK telecom market is WiMax. Hailed as the eventual successor to Wi Fi, its exciting technology that could enable wireless broadband Internet across cities and ultimately, threatens to undermine the mobile phone network providers’ business model.
This weekend, we learnt that Motorola is trailing a WiMax network in Tokyo.
The Motorola move is exciting, but shows just how far away we are from mass market availability. And that brings us to the biggest snag with WiMax. Its technology that has been touted and discussed for some time, as a result, to some, it feels like old news, and technology that has never materialised. This has created a degree of flippancy, in the city.
But, its ultimate success is a certainty, and expect fireworks- eventually.
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© Investment & Business News 2013