Ovum Says BT’s Cheapest UK Broadband Package is Dubious

Ovum’s UK broadband analyst Steven Hartley has stated that the BT’s latest home-mobile broadband package that has been much touted as the cheapest package among its kinds in the country could end way behind a profitable operation, even while admitting that the deal looked to be tremendously good value. The main point behind his perception on the context was the in-camera deal of BT with Vodafone to access the latter’s 3G towers to realize the wireless internet access offer.

Hartley makes it clear that in the backdrop of a wholesale agreement made by BT with Vodafone that appears to be an extension of the same kind of deal signed last year, the concerns of the customers prevail over the profitability of the fresh package, for the terms of the deal between the ISPs are quite obscure. According to the broadband analyzer, if the amount paid to Vodafone by BT to use the former’s network is high, there are chances for the deal to fall flat on its belly.

Another finding of Hartly is that in the UK broadband sector, it was not a common thing that a prominent and exclusive cable broadband provider in the country successfully taking to mobile broadband segment, even while moves to the opposite direction has been already made successfully by a number of mobile broadband suppliers. Here something that stands as an advantage to BT is its unlimited Wi-Fi hot-spot access that presently only O2 and T-Mobile can boast of.

Here as well BT can come up trumps, simply for the reason that the fixed broadband of O2 has limited market share and T-Mobile has no fixed broadband service at all. However, the extensive competitive pressure on BT to increase its data allowance, in a market like the UK that is highly competitive as well as bruised by the economic meltdown of the present may affect the incremental margins and top-up revenues of BT.