O2 Extends Fixed-Line Deal With BT, Adds Ethernet

O2 and BT Wholesale have extended a deal that gives O2 customers access to BT fixed lines and integrated IT services. The partnership is predicted to be worth several hundred million over the next five years.

The agreement, first signed in 2009, allowed O2 to enter the fixed line market. O2 had once been the mobile arm of BT, but was spun off in 2002 and has been owned by Telefonica since 2005. The extension will see O2 selling a suite of IT services, along with infrastructure and professional services.

All kinds of networks

Thanks to the extended agreement, O2 can now provide its business customers with Ethernet and fibre broadband for the first time, along with other products in BT Wholesale’s portfolio.

“We have seen a huge increase in the demand for integrated ICT services since we launched our first offering three years ago,” said Ben Dowd, O2’s business director. “Our relationship with BT Wholesale brings together world-class mobile and fixed-line connectivity so we can offer our business customers the best possible suite of services now and for the future.”

O2 has a growing 4G network which now covers a third of the UK population, and has a million customers, but despite the surge of mobile use, businesses still need the reliability of fixed line fibre connectivity. Fibre from BT or Virgin Media runs at speeds of 80Mbps.

O2 is also a customer of BT, which provides backhaul for its 4G network. That deal, signed in 2013 is itself an extension of an agreement for mobile backhaul signed between the two companies back in 2010.

The overlap between the two former stablemates could become more interesting in future. BT itself already offers mobile services to businesses – having recently signed an MVNO deal to use EE’s network, which replaced a previous agreement with Vodafone.

However, BT did acquire a licence for some of its own 4G spectrum in the auction of 2013. Then chief executive Ian Livingston (now a government minister) told the Daily Telegraph last year that BT would be getting back into  mass market mobile services.

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