The news that BT is to buy mobile operator EE can’t be much of a shock for anyone. There have been rumours about the company’s intention to get back into the mobile sector for some time; it left in 2002 when it span off mmO2, subsequently bought by Telefonica.
Financial analysts will no doubt pore over the details of the deal to determine whether the £12.5bn BT paid was too much, and connoisseurs of irony will reflect on the merits of a strategy for the fastest growing sector of telecommunications that appears to have been based on the hokey-cokey. (Real connoisseurs will remember that BT applied the same dance moves to its efforts to enter the US mobile market.)
The effects on the UK retail market for mobile access are not too hard to figure out. The mobile market, which is one of the most competitive in Europe, is becoming less competitive – a trend that will be exacerbated by the probable future acquisition of O2 by Hutchison, owner of its competitor 3. There will be lots more emphasis on ‘quad-play’, bundles of fixed telephony (still more or less compulsory), broadband, TV and mobile; and hopefully we’ll see the back of the ghastly EE branding (who would name a mobile network after the state of a teenager’s room?) and a return to the high street by BT.
But what is it going to mean for the M2M market and the IoT, the area on which my analyst company Machina Research focuses? Probably not all that much, at least not in the short term.
Everything Everywhere was not a leading provider of M2M solutions. Its M2M capabilities were tucked away in its wholesale team. It has historically been hamstrung by its geographical limitations (i.e. a single country footprint) and the fact that both of its parents had ambitious aims for their own M2M business units. These factors limited the opportunity that EE was able to address, and therefore its ambitions in M2M.
The new structure still sees Deutsche Telekom and Orange as parents, but with much reduced holdings in the new BTEE, meaning that we would expect them to have little or no influence on M2M strategy. So the new BTEE should be better able to pursue international opportunities than EE alone could do, although it is still somewhat held back by a lack of facilities-based capabilities outside of the UK.
On the other hand it now has access to a very large base of global enterprise customers through BT, as well as systems integration capabilities in BT Global Services. So, the combined BTEE enterprise M2M offering could look eventually be compelling.
On the consumer side we don’t expect much either. Here as elsewhere BT has had a bit of a dabble, including selling home security cameras. But whatever plans BT might have had for connected home are unlikely to be significantly affected by its acquisition of a mobile operator. That said, we do expect a more concerted effort on home automation from BT some time in the near future.
This development also, obviously, changes BT’s technology roadmap, with some significant implications for M2M-related deployments. BT have been dabbling with deploying a Low Power Wide Area (LPWA) network for a while. It has also been involved with various smart cities schemes and pilots.
The acquisition of a public mobile network clearly affects both of these. Now they have the potential to get serious with both, because much uncertainty has gone away, so allowing them to make a better strategic plan for smart cities and LPWA in a more predictable context. They also have an in-house alternative backhaul network should they choose to pursue the LPWA route.
All of this said, M2M is probably at about #96 on BT’s list of priorities in this highly disruptive move for all concerned. So we wouldn't expect much to change imminently. The impact in the short-term will be minimal.