Embattled BT is attempting to gain a head start on rivals with the launch of new packages that blend broadband, mobile and pay-TV as a single service and bill.
Marc Allera, the chief executive of BT’s consumer arm, unveiled the shift towards the “convergence” of mobile and fixed line networks alongside a broader shake-up of the business as he merges it with the mobile operator EE.
All of BT’s call centres are due to follow return to the UK and Ireland by 2020, after a similar move by EE improved customer satisfaction. A new “emotional” advertising campaign will aim to restore the BT brand after years in which marketing focused entirely on price promotions while the company faced mounting criticism over broadband speeds and reliability.
Mr Allera will seek to reignite growth in BT’s pay-TV business with a deal to distribute Amazon’s streaming service as part of subscriptions, taking a lead over Sky and Virgin Media which have so far only signed up Netflix. BT has also signed a reciprocal wholesale deal with Sky in recent months that will add more sport and premium drama channels to its offer.
The new converged services will be branded BT Plus and are scheduled for commercial launch next week. Full details of pricing are yet to be revealed, but it is understood that packages of broadband, mobile and pay-TV will cost between £55 and £75 per month depending on data and channel options. Families will be able to share data allowances and control children’s browsing via central controls.
EE stores will be used to promote BT Plus
The pricing signals that BT has resisted the urge to launch a discounting battle with rivals to attract customers to converged services. In Spain and France the arrival of covergerged services triggered steep discounting as Telefonica and Orange, former state monopolies like BT, went on the attack.
BT is taking a more measured approach as it gradually builds the network technology to reap the full benefits of the shift including cost savings. It aims to use the network of 650 EE stores on the high street to promote BT Plus and explain the benefits of convergence for consumers.
Mr Allera said: “This is something only we can do. Convergence for us isn’t just about bundling products together, it is about bringing together the best of what we do. There are a number of steps to get there but we have started.”
Next year BT will introduce a new home router that combines broadband and mobile signals to provide what it claims will be a faster and more reliable connection.
Mr Allera said: “The mobile network actually boosts the speed of the broadband network. By having these two networks in one box that also means that if your council dig up your road and take down the broadband network, the mobile network can kick and vice versa.”
Mark Allera is merging EE with BT’s consumer business
Meanwhile BT’s mobile and fixed line networks will be plumbed together by 2022. The engineering effort will run alongside the rollout of 5G mobile services and will send all data over the same core systems, which Mr Allera said will mean consumers will be able to forget about how they are connected.
The shake up of BT’s consumer arm comes after another bruising week for its parent company. BT announced 13,000 job cuts and froze its dividend as pension costs increased and regulation weighed on sales. The shares fell a further 1.9pc this morning to just above 200p, a threshold last crossed in the other direction in January 2012.
Paolo Pescatore, an industry analyst at CCS Insight, said: “This is a good first step but further changes and tough decisions still await Mr Allera and his management team.
“This update provides a much needed boost to the BT Group, given the widespread negative publicity it has endured in recent months. More importantly the new structure and strategy provides better clarity on the future direction of the consumer segment which has been in limbo for some time.”
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