T-Mobile's 20Mbps 3G service to replace home broadband

By Tony Glover Technology Editor
30 April 2006

GERMAN-owned mobile operator T-Mobile is planning to enter the broadband price war launched by Carphone Warehouse two weeks ago, The Business has learned.

T-Mobile intends to take on the UK operators by using its mobile network to offer internet access over a souped-up 3G system at speeds equivalent to fixed-line broadband. This will dispense with the need for a fixed line in the home.

Although mobile phone customers will pay £8.50 (E12.33, $15.22) for unlimited data use, T-Mobile believes it can still undercut UK operators as customers will not need to pay a fixed phone line rental, although they will still be able to retain the sort of phone number currently used for fixed line.

A T-mobile spokesman told The Business: “A key opportunity for mobile is to displace the fixed line phone. If you have a fixed line phone, you’re typically paying over £300 for line rental and broadband access, before you make a single call. Say, over £400 a year with relatively modest call volumes. Customers have a choice whether to continue paying this or to redeploy the money on to mobile. It has always to be their choice; but providing high-speed mobile broadband clearly removes one big reason for ‘having to have’ a fixed line.”

According to T-Mobile, more than 12% of UK households do not have a fixed line phone. So far the trend is mostly among the young, who have grown up with a mobile and see no reason to have one.

Earlier this year, T-Mobile, which is owned by European telecoms giant Deutsche Telekom launched its T-Mobile@home service enabling contract customers to have a fixed line number that can be reached via a mobile phone while in their home. T-Mobile has plans to launch a similar service in the UK together with a high-speed broadband connection. UK customers will be able to have an extra number which has the same suffix as a fixed-line number on a designated mobile that will be able to transfer calls to mobile phones owned by other household members.

UK fixed line operators such as BT believed they had cornered the broadband internet market when they developed DSL software to turn copper telephone wires into broadband pipes. But T-Mobile believes a new technology, high-speed downlink packet access (HSDPA), a souped-up version of 3G, will enable it to leapfrog the fixed-line operators. HSDPA can be used with a wireless box to allow PCs to access the internet.

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