Following the news that the telecoms giant is talking to EE over a reported £12.5bn acquisition deal, industry analyst Stephen Taylor explains why moving into mobile is so important for BT.
The potential acquistion of EE by BT is part of a 'vision of the future' for the telecoms company that allows it to package television and mobile services together with its broadband, strategist Stephen Taylor told an RTS event last month.
Speaking at the Connected TV: Decoded event, before news broke of talks between BT and EE over a £12.5bn takeover, Taylor explained why access to a mobile audience is so vital to telecommunications firms.
The acquisition, if successful, would hand BT control of the "UK's most advanced 4G network", it claims, and paves the way for future quad-play bundles that include TV services, broadband, mobile and home telephony.
Addressing the event on November 26, Taylor, a director of Redshift Strategy, said: "One world that we're definitely getting into is the quad play bundle - you're selling telephony, broadband, TV, and mobile all in one. That's why Vodafone and EE are in this marketplace and that's why we have the news of BT talking to EE, there's an enormous amount going on there."
Taylor said: "There is a vision of the future... where you don't bother what mechanism you're getting a signal through, you're just getting a signal. That's what the telcos have to do to make quad play compelling.
"If a telco says: 'I will give you widespread connectivity, you don't have to worry about how it's coming to your device it's just going to be there' ... then that gets interesting."
He said that the technical barriers to this while mobile phone and telecoms companies are separate are simply too high. "That's why we're seeing this consolidation," he added.
So far Virgin Media has struggled to generate interest in their bundles, but 23% of people are taking TV and telecoms together and that number is growing rapidly, with platforms like Sky also offering broadband services. Currently, according to Taylor, only 1% of consumers take a quad play bundle.
He said: "At the moment, consumers don't see much value in taking mobile alongside their broadband and television. There needs to be something that says 'this makes sense for me'. Either I'm getting a better deal or it's easier to work with."
Addressing moves by BT towards buying television rights to premium sports events like the Premier League or Wimbledon, Taylor said: "The reason that BT is in this business is in order to defend its position in the broadband marketplace. If you look at TV on its own it can't possibly be a profitable business, but overall it makes enormous sense for BT. They're selling in a bundle."
See the full video and report from Connected TV: Decoded here.
By Tim Dickens