BT on the verge of launching Bluephone

Project Bluephone could drive the take-up of voice-over-IP in the mobile space, unless billing issues scupper it

After nearly two years of expectation and rumour, BT is ready to launch Bluephone, its converged mobile handset. While Bluephone is likely to experience only limited success in terms of adoption, its real importance lies in its potential to revolutionise mobile phone tariff models in the future.

The aim of Bluephone, which will be launched next Wednesday, is to provide consumers with a single cordless handset which routes calls and data packets over fixed-line BT broadband networks when they are at home, but switches seamlessly over to a Vodafone mobile network when they are out and about.

"This is an early example of something that will be a reasonable success into the long-term," said Dean Bubley, an analyst at Disruptive Analysis. "If you look forward five years, only a relatively small number of mobile phones will be able to do this, but it’ll be a viable market in its own right."

Bubley feels that the significance of Bluephone lies not so much in what it purports to do, however, but in its status as "the vanguard for voice-over-IP hitting the mobile world".

Over time, mobile VoIP will force mobile-only carriers to change their pricing structures and customer service strategies in order to remain competitive, not least because BT "is positioning itself as a mobile VoIP specialist" and is likely to take them head on.

"If you look at VoIP in the fixed world, it’s already demolishing many fixed operators revenue streams, which has led some incumbents to launch their own VoIP and wholesale services. VoIP will have the same effect in the mobile arena too, although it won’t take off before the end of the decade," Bubley said.

While the first version of Bluephone will be based on Bluetooth and aimed squarely at the consumer market, later releases will support more enterprise-friendly Wi-Fi and WiMax wireless networks. Over time, such networks will enable customers to make Internet-based voice calls at much lower tariffs.

At the launch next week, however, Bubley believes that BT will play up the value provided by Bluephone bundles.

"I strongly expect BT to include the base station and possibly handsets in the price of the service. The last thing that BT wants customers to do is go to PC World to buy a Bluetooth base station and configure it themselves at home. If it can ship them for free as part of the package, it’ll make huge savings on customer support calls," he said.

Bluephone is based on a technology called Unlicenced Mobile Access (UMA), which lets users make mobile calls using their own Wi-Fi or Bluetooth systems and broadband connections. Because UMA allows an operator to charge these calls over Wi-Fi and Bluetooth as mobile calls, some in the industry are concerned that users could be billed at mobile rates when they use Bluephone as a home phone.

Bubley, though, thought it unlikely that concerns regarding all Bluephone calls being charged at mobile rates would be justified, although he believes it probable that incoming calls will be charged in this way.

This could potentially penalise people who call a Bluephone, if they aren't billed at the cheaper landline rate when appropriate.