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Colt's mobile plans still unclear

Telco is apparently developing a mobile service but can't say what it is, after spending £1.5m on radio spectrum
Written by Richard Thurston, Contributor

Colt has confirmed it will not roll out any mobile services in the foreseeable future, even though it has paid more than £1.5m for a mobile licence.

Nearly all telcos, including Colt's rivals BT and Cable & Wireless, have developed a range of wireless options for businesses that want to connect their mobile workforce.

The lack of a commercial mobile service — or even an obvious strategy — is all the more surprising as Colt bought a mobile licence in May 2006 for £1,513,218. With hindsight, it appears that Colt overpaid for this licence — which is for use in the GSM guard band frequency — as other succesful bidders paid as little as £50,110. The benefit of the GSM guard band frequency is that it could be used to create a low-power GSM network based within a customer's building.

Colt told ZDNet UK on Thursday that it may sell the licence in the future, although it was not currently expecting to do so. Colt's UK managing director Lakh Jemmett said, "The opportunity to provide a fixed-mobile convergence solution is one of the reasons we acquired the guard band [spectrum]. We need a robust offering in that [fixed mobile convergence] space and that principally means aggregating traffic in buildings."

Jemmett said that Colt is looking at a number of wireless technologies, including low-power GSM, but he refused to say which ones would be made available for customers and he also refused to give a timetable for rollout. And referring to the £1.5m licence, he said: "We could sell it. But I'm not looking to sell it."

Jemmett also said that Colt was putting a freeze on its expansion into India — its Indian operation has grown 20 percent in the last two months to 800 staff, while UK staff numbers are stabilising, having dropped by more than 200 during 2006. The managing director was keen to point out that India-based staff would not have first-line contact with customers, who would, in the majority of cases, contact either the Barcelona operations centre or a UK-based channel partner.

Colt is trying to expand its reseller channel, which will try to sell its services to smaller businesses. The channels will be headed by small systems integrators and data distributors, including recently signed Rocom. "The channel is critical to us," said Jemmett. "What we have done is to upskill and uprate the channel. We are providing the channel with a greater product range to sell." Colt's reseller channel currently contributes 35 percent of its revenue, which the telco wants to bolster to 40 percent.

Jemmett also stressed that Colt is trying to shift away from providing traditional TDM-based voice services and into providing managed data, IP voice and hosting services. The telco says its London data centres are now full — leading to customers trying to gazump each other in order to acquire hosting space for their servers. The company is about to open a third data centre in Birmingham.

Colt is also keen to lobby Ofcom over a range of regulatory issues. One of the top items on Jemmett's agenda is to try and force differentiation between BT's symmetric DSL and leased-line services. Currently, both products are regulated identically, despite the fact they use different physical media, meaning that Colt cannot provide SDSL lines to businesses any more cheaply than legacy leased lines.

Colt says it is further hindered by inferior service-level agreements offered by BT for SDSL.

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