BT spreads its dominance

Two of the most dominant players in their respective industries, telco British Telecommunications PLC and software giant Microsoft Corp., yesterday announced a ‘strategic’ broadband alliance which many will view as a bid to control the market.

This moves Microsoft’s relationship with BT on to the same footing as its other alliances in the global telecom sector, such as those with Verizon Communications Inc. in the US and Korea Telecom Corp. in Asia.

But ISP’s America Online Inc. and Telewest Communications PLC have both attacked the partnership.

“A partnership between two already dominant companies is always worrying from a consumer point of view,” said a spokesman at AOL. “More competition pushes prices down, market dominance does not.”

BT’s powerful position has already been attacked by Freeserve, which accused the company of using its previous monopolistic standing to market its broadband services.

No specific details of the partnership have yet been released, but it is expected that Microsoft will be pushing its Xbox gaming community and .Net technology. The company is to become the software and digital content provider for BT Home Computing.

“Make no mistake, this alliance is not window dressing. Our relationship with Microsoft in Europe is moving on to an unprecedented and exciting level that will bring real benefits for the customers of both companies,” said Ben Verwaayen, chief executive of BT Group.

“BT has accelerated on all fronts during the past year to make broadband available to more customers across the UK. Now we want to do all we can to make broadband as attractive as possible to potential customers, residential and business, by giving then the compelling applications that will deliver a superb online experience that meets their needs and aspirations,” he added.