The decision by O2 to enter the fixed-line telecoms market means the mobile phone company has returned to a market it left behind when it split from BT in 2001. It opens up a new front in the battle between the companies. BT, which operates a mobile brand via a wholesale deal with Vodafone, already competes with O2 in the business market and the two are also rivals in broadband.
O2’s move suggests that fixed-line telecoms should no longer be viewed as a dying business. Given the success BSkyB and Virgin Media have had bundling services such as broadband and TV alongside fixed-line telecoms, perhaps the biggest surprise is that O2 has not joined the ‘one-stop-shop’ movement before. Virgin Mobile has led the way in including mobile alongside broadband, fixed-line and cable TV.
There are some who doubt that many consumers will want to use the same company for mobile as for broadband and TV. But O2 hopes to have one million broadband customers by the year end and adding fixed-line services to its armoury could be the trick that gets it there.