Telecom firm ringing changes

A revolutionary new service combining the benefits of mobile phones with low-cost VoIP technology from the internet is set to transform the business of Northumberland company BNS Telecom.

BNS Telecom

A revolutionary new service combining the benefits of mobile phones with low-cost VoIP technology from the internet is set to transform the business of Northumberland company BNS Telecom.

The new WiDial service works by offering cheaper telephone calls to mobile phone users by allowing them to connect calls using the VoIP (Voice over Internet Protocol) system currently used mainly from PC to PC.

Providers such as Skype have been offering the chance to make free phone calls over the internet for some time. But BNS is aiming to offer some of the same benefits while using mobile handsets. WiDial will see mobiles work normally most of the time, but when the user is in a WiFi `hotspot' - where you can get online with your computer without plugging in to a phone line - they will be able to make cheaper phone calls than usual.

It is hoped the venture will lift the fortunes of the Aim-listed company, whose half-year profits were 47% down to £654,000 on sales of £25.8m when they were posted in October.

Prudhoe-based BNS, which employs 230 people, spent £1.2m buying four VoIP specialist companies, since it floated in November 2005. The VoIP business has been one of its more profitable arms over the last year. The new move will see it sell to individuals rather than its main current business clients.

Chief executive Garry Moat said: "This is something we've been working on for a long time, and now it's ready to go live on Monday, April 16.

"The market we are targeting is anybody who makes telephone calls. We've been working very hard behind the scenes to build up a significant VoIP network - we will be able to handle 500 million minutes of traffic per month. So there is a significant capacity to use."

He recognised that the impact of WiDial could mean further expansion was needed at the company's headquarters. Mr Moat said: "We have already made significant investment at Prudhoe and we have additional space and land to accommodate further developments."

BNS will be selling mobile handsets which can use the VoIP technology, and then users can download the software necessary to use them via a text message.

The service, offering to provide both the hardware and software in a complete package, is an industry first, though companies such as Truphone and Fring provide the calling options, and BT's `Fusion' allows mobiles to use VoIP when the user is at home.

Mr Moat said: "We are ahead of operators like Orange and O2 - we are the only people who have launched a service of this kind in the UK, with a full wrap-around package.

"You will still be able to use GSM (conventional mobile reception) but we have a facility to move from that to VoIP and the call will jump with you.

"When you walk into any hotspot, you will be able to make calls at a ridiculously low price. With international calls, the savings are substantial - between 95% and 97%, versus normal GSM carriers, and about 50% cheaper than on a landline."

Analysis

Dennis Jarrett, editor of industry magazine Mobile Business, said there was potential for BNS's new WiDial service - but the company was not alone in the market place, and could get overtaken when bigger players take an interest.

"This is not particularly revolutionary, as there are several other companies doing it. Truphone and Fring, for instance, are two companies making a lot of noise. It's potentially tricky to make money out of - but it's potentially very lucrative, too," he said.

The big mobile networks such as Vodafone, Orange and T-Mobile were not yet in the VoIP market place.

"If BNS can get in on the ground floor with WiDial, they have a good chance to make some money in the short term - though they may well get swamped or bought out by the big boys in the medium term."

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer