C&W to take on mobile giants with new workplace service

Cable & Wireless is set to enter the cut-throat mobile market and compete directly with the likes of Vodafone, Orange and O₂.

The company is to launch a service that will enable its business customers to make calls over a small mobile network within offices. Calls will then be routed over a normal fixed-line broadband internet network.

The move by C&W is part of a telecoms industry upheaval called "fixed mobile convergence" (FMC), which threatens traditional mobile operators by taking calls off pricey national mobile networks and putting them on less expensive landlines.

A spokeswoman for C&W confirmed that the company was "planning an FMC service" but declined to give a timetable for its launch. However, industry executives said that the service could be up and running within a few weeks, once the company finalises a roaming agreement with an unnamed national mobile operator, which would carry calls when the user is outside a corporate site.

C&W has already lined up Alcatel Lucent to manage the in-building service, one source said.

The UK telecoms company acquired mobile capability last May when it, and 11 other bidders, including BT, O₂ and Colt, bought spectrums known as "guardband" in an auction presided over by Ofcom, the telecoms regulator. Guardband frequencies are close to mobile frequencies and can be picked up by existing mobile handsets.

Mobile operators last week downplayed the threat posed by a C&W service. "We already operate in one of the most competitive markets in Europe and new entrants are nothing new," said an Orange spokesman.

An O₂ spokesman added: "It's not a threat. It's a fairly niche service as it provides only in-building coverage and is unlikely to be offered nationwide."

But Jeremy Green, an analyst with research firm Ovum, said the new C&W service could have "quite a big impact": "Many businesses are in a state of quiet despair about their mobile costs, and a solution that at least helped to control spending on mobile calls while employees are still on the company premises could be quite attractive."

O₂ has already said that it is considering offering a similar converged service to home users.

The emergence of guardband services is a precursor to more disruption expected next year when Ofcom auctions off further spectrums that could be used for WiMax, a wireless network technology with far greater range than existing WiFi services. C&W will announce its annual financial results on Thursday.