BT to join 3/T-Mobile's MBNL party?

Floating my boat today (well, yesterday actually but I've been collecting my thoughts) is this news report that BT is "planning a return to the mobile market" in conjunction with T-Mobile and 3, who are currently in the process of combining the network assets under the MBNL umbrella. No further details were forthcoming and I'm hesitant to speculate over what form such a collaboration could take. My assumption is that something relatively minor has been blown out of all proportion. Nevertheless one has to wonder whether a bit more network-level convergence might not be a good thing in these trying economic times. At face value there seem to be strong arguments in favour of getting BT involved.

Of course there's little to surprise us in the fact that operators are in talks about joint ventures, collaborative efforts, network sharing and the like. In mature competitive markets (think automotive, banking etc), particularly during periods of economic instability, the best way to remain competitive is to gain scale. Usually this is through M&A. In the vendor space we've seen this a lot recently (Nokia Siemens Networks, Alcatel Lucent). In the service provider/network operator space there have been a few examples. However, there is a ready-made alternative to full mergers: network mergers, i.e. sharing network assets but having separate sales/marketing organisations.

T-Mobile and 3 have already locked in a network-sharing deal in the UK. Adding a further partner, in the form of BT, makes some sense. It could potentially introduce a further core and backhaul element into the network share, it would facilitate a move into quin-play/femtocells (neither 3 nor T-Mobile offers DSL in the UK) and BT would also be better positioned to address the enterprise segment than either of the consumer-focused mobile operators. BT would also potentially bring to the table some wireless assets in the form of Openzone and FON.

From BT's perspective it makes sense to get back into the mobile market at a time when its DSL revenue is under some threat from mobile broadband. The extent of that threat is frequently over-estimated but it does exist. Analysys Mason's forthcoming report Mobile broadband in Europe: forecasts and analysis 2009–2014, which will be published in a couple of weeks, will tell you exactly how much of a threat mobile broadband poses.