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Opinion-BT Fusion

BT Fixed-Mobile Service-Fusion

BT announced its Fusion Launch (formerly project Bluephone). BT Fusion works just like a mobile phone when you are out and about, but switches automatically and onto a BT Broadband line when you get home. That means you have the convenience and all the features of a mobile phone but with fixed lines prices and quality. See BT Fusion Website

Korea Telecom launched a similar service in August 2004.

BT faces some issues in this market:

- Bluetooth is not used widely in the business community for WLAN applications and public hotspots don't use it at all, so it's important to introduce a WiFi version of the service for businesses and WiFi access.

- How easy will it be to persuade people to move their mobile service to another provider (BT uses Vodafone's network as an MVNO)? The lessons of carrier preselection shows that it takes some time for this to happen. MVNO's have also been able to capture customers, but are these just looking for a better deal and will they be loyal?

- Bluetooth range may be a disadvantage compared with DECT, which most people are used to.

- It will cost a new subscriber just under £40 ($70) a month for the service which includes 100 minutes of free voice calls. This is made up of a fixed line, a broadband connection and the mobile phone line rental.

-The cost of delivering a call can be worked out by taking total network costs and dividing it by call minutes. Vodafone handled 96bn minutes from 171m customers in 6 months last year; 560mins per customer. It made £4bn profit on revenue of £18bn. So network costs were £14bn, or £82 per customer. That works out at 15p per minute. Not far off the average revenue of 19p per minute.

-The cost of handling VoIP as opposed to circuit-switched voice is generally less as capacity of expensive transport links can be avoided by using the Internet which is free of call charges, instead of tying up 64kbps links for the duration of the call. This is why Skype can do it for free apart from the last hop onto the PSTN. So the part of the call in VoIP over a UMA network will cost less than the equivalent over the PSTN or over a GSM mobile network. (The GSM network relies on the PSTN for most of its call transport capacity, by the way, as much of the backhaul from the base station uses PSTN capacity.)

-The VoIP part is between the user and the UNC, which is a sort of basestation. The rest of the call is circuit-switched between the UNC and destination handset over the mobile network (which uses bits of PSTN on the way). So the most it can be saving is a half and its probably nearer a third. So instead of costing 15p a minute it's probably only costing 10p. That would nearly double Vodafone's profit, assuming they owned the PSTN. Most mobile companies in Europe do own the PSTN (as an incumbent) so there is some reason to deploy FMC.

BT Fusion Phone

Motorola handset for BT's Fusion service.
BT Fusion Phone

KT OnePhone

KT OnePhone network diagram-source Korea Telecom
KT OnePhone