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June 15, 2005updated 19 Aug 2016 10:11am

How Skype Fused BT

News of the launch of BT Fusion is not altogether unsurprising. If you missed the announcement, BT said it will soon launch an offering whereby subscribers are given a wireless router and a mobile phone, and when they are within range of their

By Jason Stamper Blog

News of the launch of BT Fusion is not altogether unsurprising. If you missed the announcement, BT said it will soon launch an offering whereby subscribers are given a wireless router and a mobile phone, and when they are within range of their router they only pay standard BT landline rates. When they’re not, the phone switches automatically to the Vodafone network for a typical mobile network service (and pretty typical mobile call charges too).

You have to be a BT broadband subscriber, and initially there’s only one phone option, a Motorola V560 handset albeit with plenty of bells and whistles. You can hook up up to six of the phones to a single BT Home Hub wireless router, and make up to three calls concurrently. You can also use the wireless router to hook up PCs to BT broadband. You can even keep your existing mobile phone number.

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BT is hoping that the package will prove attractive because subscribers get the flexibility of a mobile but with the lower call costs of the BT fixed network when they’re in range of their wireless Home Hub. "Put it this way: you’re getting the cost of a fixed line, the convenience of a mobile and better coverage. Why wouldn’t you be a customer?," asked Ian Livingston, head of BT Retail. BT hopes this argument will also drive additional BT broadband subscriptions.

But let’s be honest, BT wouldn’t be doing this if it wasn’t for Skype. Analyst firm Evalueserve reckons there are about 13 million Skype users worldwide, for example, and that numbers are growing at about 80,000 a day. It believes Skype could have up to 245m subscribers by 2008 – and that excludes business customers, which are yet to switch to Skype in any great volume.

But even those figures could be conservative. Adoption curves have a funny habit of reaching a tipping point, when adoption accelerates even further. The attractiveness of the Skype service increases each time another convert signs up, because you can only use Skype to call people for free if they are also Skype subscribers. If you have three people on your ‘buddies list’, Skype is good. If most people you know are on your Skype ‘buddies list’, it’s even better. As more and more people say to someone they know, "are you on Skype?", there could be a multiplying effect.

BT doesn’t want its landline customers to start using Skype for free, whether or not they happen to use Skype over BT Broadband. With BT Fusion, it believes it may just get its foot in the door before Skype adoption really goes mental in the UK. If it can sign enough people up to its service, show them good call quality and give them the flexibility of mobile roaming when away from their BT Home Hub, those people might just not become Skype converts in the first place.

You can see some advantages of BT Fusion for UK customers. BT is a brand they trust, and not everyone is tech-savvy enough to install Skype anyway. Also, Skype isn’t ‘always-on’ like BT Fusion, because for Skype to work you need each caller’s computer to be running. Aside from Skype, there’s also the convenience factor of BT Fusion: your broadband, phone and mobile are suddenly all served by just one provider, which is a big plus when it comes to billing and customer service.

All in all, this is a logical next step for BT as it continues its battle to stop its customers using unaffiliated mobile networks when they’re not in the home, and from using Skype, Callserve, Vonage, or a.n.other when they are.

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