BT signs four out of five UK cellcos for managed backhaul

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BT signs four out of five UK cellcos for managed backhaul

By CAROLINE GABRIEL

Published: 7 October, 2008

READ MORE: UK

UK incumbent telco BT has signed up a fourth cellco for high speed backhaul services, adding 3 UK to existing deals with Vodafone, O2 and T-Mobile. Of the UK mobile operators, only Orange now remains outside the BT backhaul fold.

The telco's Wholesale arm will generate hundreds of millions of pounds from its five-year contracts, which leverage its new all-IP 21CN (21st Century Network). In a statement, Emin Gurdenli, technology director at T-Mobile UK, which finalized an earlier deal this week, said: "This agreement with BT will make sure backhaul is not a constraint now or in the future at a time when T-Mobile is experiencing strong growth in mobile broadband and other mobile data services."

This is a major breakthrough for BT, which had faced serious erosion of its traditional T1/E1 leased line revenues from mobile operators, as they (led by Vodafone) increasingly turned to more cost effective and flexible approaches such as wireless backhaul.

The key to BT's new success with the cellcos is that its managed services contracts are more flexible, in terms of backhaul capacity and charges, than most cellcos enjoy. Because BT is providing managed services rather than just lines on a fixed lease price, the mobile carriers will pay only for the bandwidth they use, and so can scale up in line with demand for data services - something that would be hard to predict and implement using traditional leased line deals or fully owned wireless equipment.

Under the contract, BT Wholesale will provide backhaul speeds of up to 60Mbps on an on-demand charging basis, connecting the base stations, initially at least, using a combination of IP/Ethernet and leased lines, as 21CN goes through its roll-out.