BT Retail CEO Pierre Danon is on a mission to bring commercial broadband to Britain. On Aug. 1, the company, a unit of BT Group (BTY
), launched the country's first wireless local-area network (LAN) in conjunction with technology partners Cisco Systems (CSCO
) and Motorola (MOT
). Now, Brits can get wireless broadband Internet access from BT's more than 20 so-called Wi-Fi hot spots at airports, hotels, shopping malls, and even gas stations. By June 2005, BT plans to have 4,000 hot spots across the country.
Branded BT Openzones, these hot spots will offer Internet access that's expected to be one-tenth as expensive and four times faster than third-generation (3G) mobile services, which aren't expected to be introduced until 2003. Danon sees wireless LAN as complementary to 3G. Mobile Internet is aimed at people on the move, he says, "while Wi-Fi is ideal for people on the pause."
In his two years at the helm, Danon's focus on innovative new services such as Wi-Fi has helped transform BT from a telecom laggard to a wireless pioneer. In the past, "telecom companies, including BT, weren't innovative enough because they didn't have to be," concedes Danon. "But now we absolutely need to be, because growth will come from new services that will cannibalize our core offerings such as fixed-line phone service."
READY TO ROLL. And when you can't innovate, imitate. "I always tell my team, 'Don't reinvent the wheel, look at what's popular around the world -- then steal it,'" jokes the 46 year-old Frenchman. Indeed, after Danon noticed the increasing popularity of Wi-Fi in the U.S. more than a year ago, he set out to bring the technology to Britain.
In June, when the British government changed its wireless regulations to enable Internet service providers to offer wireless Web surfing in public places, BT was ready to roll. The network will cost around $15 million in the first year and is expected to generate $45 million a year in revenues by 2004.
Analysts say the growth potential is enormous. By 2006, as many as 15 million Europeans will use wireless Internet services such as BT Openzones, predicts Analysys Research Managing Director Ross Pow. Danon believes Wi-Fi will really take off with the advent of ultrawide broadband in coming years. And by yearend 2003, Danon hopes to have deals with international partners in place, so that BT's customers will have Wi-Fi coverage abroad.
For now, though, he's concentrating on Britain, where he thinks BT, as an established telecom, will have major advantages over other smaller rivals. He notes that in the U.S., wireless LAN providers are "sites with clever products but no customer base." Danon plans to convert many of BT Retail's 21 million residential and business customers to wireless LAN.
SPOT CHECK. And as the country's dominant fixed-line phone company, with a market share of more than 70%, BT Retail already has relationships with potential hot-spot site providers, such as airports and other businesses that lease pay phones from BT. Danon plans to piggyback wireless LAN services onto such existing deals.
BT will offer a range of tariffs for its wireless LAN: a $120 per month subscription, pay as you go, and a mix of the two. Will it be profitable? Danon reckons it's bound to be. Unlike 3G, he quips, "no one has paid $7 billion for a license." By Kerry Capell in London