Did you know that a significant chunk of cell-phone calls (20% +) are made to contact people who are within easy reach of a landline or a private telephone exchange ? As a fixed network telecom service provider, BT Group Plc has dreamt of a business model which will divert mobile customers to fixed networks - and thereby offer value by cutting expenses on unnecessary cellular calls.

Dream Models
Some of the best opportunities start as nothing but dreams of new, hitherto non-existent business models, typically based on emerging technology. Once these dreams are successfully mounted on the foundation of solid technology and a revenue model created, they (hopefully) become viable business models.
Today's rapid pace of technology development is well suited for such dream models.

Taking advantage of the advances in wireless technology, BT saw an opportunity in diverting mobile phone revenues to its own fixed line networks. And its business model rested on the knowledge that 20% of mobile phone revenues are from calls made from / to the same office / residential complex.

BT's dream is to install Bluetooth base stations and supply "bluephones" (which combine cell-phones with Bluetooth telephony) to its customers. Whenever a customer was within reach of his Bluetooth base station, the phone will automatically use the landline network - thus cutting down cell-phone billings for the customer, while increasing revenues for the fixed line operator ! (When outside the range of the Bluetooth station, the handset would of course, switch to the cell-phone network.)

As compensation, BT would perforce have to share this revenue with the mobile operators. But in reality, BT would be diverting a slice of existing cell-phone revenues to its fixed line. While deflecting a second slice to the customer as savings !

The Scheme
Starting June 2004, BT is expected to offer mobile phones that will help users save money by automatically replacing cell-phone calls with cheaper land-line calls within an office / residential complex.

To achieve its objective, BT will provide the user a single handset which will divert a cell-phone call to a land-line network. These special telephone handsets will be loaded with Bluetooth cordless telephony firmware. Whenever they are able to "sense" their Bluetooth base station, they will automatically switch to the Bluetooth network. Thus the call will be forwarded to the fixed network (landline) instead of the cellular network, thereby creating a saving for the customer. (Apart from revenue for BT !)

In short, the customer will be billed for the most economic route to / from the handset. (Large enterprises will probably be able to further cut costs by installing & maintaining their own Bluetooth station based networks.)

BT has projected revenues of nearly $ 2 billion from Project Bluephone by 2009.

The Partners
To realize this dream of becoming a "converged communications carrier", BT must collaborate with mobile service providers. So it is no surprise that BT has already signed up partnership deals with mobile phone service providers.

BT had first tied up with German service provider T-Mobile's UK arm for a combined fixed-mobile package with handsets supplied by SonyEricson. Called BT Mobile, it claims to be signing up 20,000 new customers per month.

Quite clearly interested in larger revenues, BT has just announced plans to end its partnership with T-Mobile and transfer the service to telecom giant Vodafone Group plc. With handsets to be supplied by Alcatel.

Futureproof
Why would a mobile service provider be a willing partner in a project that would eat into its existing revenue ?

Because the scheme would save money for the customer. And in a competitive market, the customer could be persuaded to switch to the more economic mobile service - thereby making up revenue losses with new business.

And because the decrease in existing revenues would be accompanied by lower consumption of bandwidth, leading to un-utilized bandwidth. Which in turn could service the new customers.

No wonder Vodafone has agreed to become BT's partner !

Meanwhile, Brits may get ready for the blitz, i.e. the "Bluephone" marketing campaign!