I am absolutely amazed at the amount of unwarranted publicity that has been accorded to British Telecom’s BluePhone announcement, which seems more an experiment, than a commercially viable product. 400 people are getting to beta test it for godsake, and that’s not like earth shattering. The so-called convergence device, essentially a Motorola handset that utilizes a technology called UMA allows phone operators to leverage the fast growing wi-fi networks. UMA is part of the 3GPP (3rd generation partnership project) and basically allows seamless transfer of phone calls to and from mobile cellular, wifi or landline networks. The actual switching happens inside the super pop, (or what used to be the central office) and needs some client side intelligence, provided via an agent software.

BT will take Vodafone’s wireless calls, and put them on its broadband network using WiFi. The idea is that instead of paying seriously expensive wireless call prices, customers would pay cheaper landline prices which can be between 3 pence a minute at peak or 5.5 pence for upto an hour during non-peak times. Unstrung Estimates savings at about 95%. The customers can also login to wifi using BT WiFi hubs as well.

Think of it as an MVNO masquerading as a convergence offering, though not entirely. There are a lot of problems for this to work.

Benoit Gariod thinks its like skinning the cat thrice: First you must be a BT Broadband customer. You pay normal landline call charges when making outbound calls from home, and your friends who are calling you will be paying mobile tariffs.
Martin adds, “The fact that this product is also tied to BT’s own broadband offering suggests they just don’t get it. That’s monopolist incumbent-think. Just work on taking a small slice of lots of value chains, not large slices of a few.”

James Enck writes: “Firstly, the product is only going to be marketed to BT Broadband customers, of which there may be something like 2.5m by year-end … how many will be looking to change mobile service providers? In the past, this might have been a more straightforward calculation under 12-month contracts, but UK operators are pushing 18-month contracts, which makes the phasing of renewals more complicated.” What more – why should you even bother when you can get cheaper VoIP services which make the hassle of two numbers worth the hassle? Mike sums it up nicely when he riffs, “…all for the “convenience” of using a single device that isn’t very cool and doesn’t have many of the features people expect in their mobile phone.”

Memo to BT: make it simpler, cheaper and easier for consumers and you have a shot at making this thing work.