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BT said on Wednesday that it will work with Motorola and Cisco to build the first public-access wireless LAN in the UK. The target will be public "hot spots" where people will be able to use a laptop or another device to log on to a wireless broadband connection to check e-mail or surf the Web.
The aim is to hook up 400 sites by June 2003, and 4,000 sites by 2005. BT said it was talking to Costa Coffee about the network, and said it was also in advanced discussions with leading retailers and property owners. To use the service, customers will need to be within around 100 meters of a hot spot and have the right software on their laptop or handheld device. They can then connect to the Net or to their own corporate network at up to 500kbps, BT said. BT said it will be working with corporate customers to bring the same technology into offices.
Also on Wednesday BT announced that it will re-enter the mobile market by purchasing airtime from mmO2, its former mobile subsidiary which it spun off as a separate entity last year. BT said that it had agreed wholesale airtime terms with mmO2 to launch a new mobile product range, and that it has a three-year agreement to act as mmO2's sales channel in the business market.
Using its own brand, BT will offer standard mobile and high-speed GPRS mobile services, as well as mobile business services like personal information management and secure corporate intranet access. The company will announce the full portfolio this summer, and tariffs for WLAN access will also be announced this summer, a spokesperson told ElectricNews.Net.
Pierre Danon, chief executive officer of BT Retail, said BT was still very much in the mobile market.
"Since the demerger with mmO2, there has been a false assumption that because we do not now physically own a network, we are somehow no longer in mobile," Danon said in a statement.
Speaking on CNBC on Wednesday, Danon said the outlay for the wireless services will come to less than STG10 million, which represents a "marginal" investment for the company and offers a way for BT to leverage its infrastructure. "We have a very large amount of capital invested in the ground in the UK, and we want to make it as profitable as possible," Danon said.
Danon said that BT was looking for new businesses, including its wireless initiatives, to bring in about 30 percent of the company's cash flow in the coming years. He also said that BT will foot the cost of installing the WLAN infrastructure and will share revenue with the "hot spot" venues.
WLANs have come under fire for their security, with critics contending it is simple for attackers to intercept and eavesdrop on Internet traffic over the networks. Danon said BT knows security is "a basic of e-business," and said the company was working to ensure the same levels of security as a fixed-line Internet connection.
The company said it believes its mobility strategy will contribute new revenue of STG180 million a year by 2004/2005, possibly rising to as much as STG500 million annually in five years' time.
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