BT Cellnet still dawdling in the data doldrums

NEWS Data sales failed to add a sparkle to BT Cellnet's results today as the group reported slow growth in customer numbers and subscriber revenue. BT Cellnet, the UK operation of mmO2, BT's recently floated wireless division, didn't publish any specific data about its GPRS services which it launched in June 2000. BT Cellnet did announce that 13.4 per cent of its revenue came from data, but the majority of that will have come from text messaging, which grew an impressive 23.5 per cent over the previous quarter. Dion Price, analyst at Mobile Streams, said: "The vast majority of this data revenue is SMS. GPRS won't take off until they launch multimedia-messaging service (MMS), which allows people to send pictures from their phones. But it will need the networks to get behind it and kick start it and they aren't doing that. "From a sheer logistical point of view, it's actually very difficult for a subscriber to get connected to a GPRS network at the moment." With the European mobile market approaching saturation, the mobile industry is hoping that sales of new data services like GPRS and eventually 3G will allow it to increase the amount of money it makes from each individual user. But for BT Cellnet it is taking a long time to happen. With little new money coming in from data, BT Cellnet's figures for average revenue per user for their high-end customers rose very slightly from £489 per year to £493. Nonetheless, reaction to the group's overall performance has been mildly positive. The operator has effectively bowed out of the battle to overtake Orange and Vodafone in the UK and is now concentrating on cutting costs. Price of Mobile Streams said: "They know their place in the market and that they're not going to compete with the top two. "Some people are saying that these figures are lower than expected, but given the time of year and increased competition in the market, they're not bad. They're just plodding along." BT Cellnet acquired 107,000 customers in the past quarter, of whom 56,000 were the higher-earning contract customers. Churn, the rate at which customers leave to join other networks, continued to fall, reaching 34 per cent this quarter, but this is as much a consequence of reduced marketing spend in the industry as a whole. As part of the cost cutting measures, the company announced that it is to cut 20 per cent of its staff.