O2 not to use BT due to cost factors

O2, the mobile company that owns Be, a UK broadband provider of ADSL 2+ broadband is under pressure from Telefonica, its parent company that made the mobile phone company to delay its entry into UK broadband market using BT. O2, a subsidiary of Telefonica acquired Be for £50 m and made a pact with BT to expand its residential broadband network as Be had a coverage of just of half of the UK households. The pact which is supposed to extend for a period of two years is now considered to be expensive by O2 although BT lines give O2 access to rural areas in UK. As a result, O2 is reported to have dropped its plans to extend its network nationwide in UK and decided to content with the role that it currently plays in UK broadband industry.

Another UK ISP, Carphone Wharehouse which owns AOL and TalkTalk, also use BT to enable its TalkTalk broadband packages be available across UK resulting in loss of £5 a month on each of its customer.

O2 which has been writhing under financial constraints largely due to intense competitions it faces with its rivals like Carphone Warehouse, Vodofone and Sky broadband is set to cut its expenditure by sacking considerable number of its corporate members in Ireland as well as in UK. Now, O2 has decided to use the Link, the network of retail stores to make its services available within the reach of this network. Only the areas that are left uncovered by Be broadband using the retail stores, would be covered by using BT, the report says.

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