BT to use Bluetooth to cut mobile costs

Summary:The UK's dominant telco unveils its move back into the mobile space, with dual-band Wi-Fi and GSM phones a key part of its future strategy

BT is working on a method of cutting mobile bills and boosting functionality by letting customers use wireless technologies such as Bluetooth and 802.11b to make phone calls.

The telco said on Tuesday that trials of the service -- which will allow mobile calls to be routed through fixed line networks rather than GSM mobile networks -- are beginning. The initial triallists will be BT staff and selected business customers, using Sony Ericsson handsets.

"Triallists will be able to use the mobile normally when they are out and about, but when in a Bluetooth site, such as BT Centre, or eventually people's homes or offices, their calls will be routed over the fixed network rather than the GSM mobile network," said BT in a statement. "This will mean that users will benefit from cheaper and clearer calls."

BT's eventual goal is to equip users with phones that are compatible with both Wi-Fi and mobile networks. This would let them surf the Web at high speed when within a Wi-Fi hot spot, and also make voice calls over GSM at other times.

According to reports this week, such dual-mode Wi-Fi and GSM phones should hit the market next year.

Many new phones today support Bluetooth. However, Bluetooth hot spots are far less common than Wi-Fi offerings. Wi-Fi is also a superior technology for BT's purposes, as it provides more bandwidth and works over a longer range. However, Wi-Fi uses significantly more power -- a problem for devices dependent on batteries.

Mobile mistakes?
BT's plans for converged GSM and Wi-Fi mobile devices are just one part of the telco's new push into mobile.

The company also announced on Tuesday that it will sell a combined fixed-line and mobile product for families, called BT Mobile Home Plan. This will let people telephone their home number from their mobile for free, as long as the call lasts less than two minutes. This follows BT research that found that many people call home around five times per week, with each call lasting 2 minutes or less.

As expected, BT has formed an alliance with T-Mobile, and will resell spare capacity on the mobile operator's network.

BT hopes that services such as Mobile Home Plan will help it achieve its target of £300m mobile revenue by 2005.

Critics, though, are claiming BT's move back into mobile is proof that it erred by demerging its mobile operations back in 2001, when it sold off its Cellnet arm, now called mmO2.

It could be argued, though, that BT performed something of a financial coup. MmO2 shares were floated at 74 pence when the company was demerged, but the stock is now trading at just over 52p, suggesting BT got a rather good price for its asset.

Topics: Networking

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