Last week, BT announced a multibillion pound upgrade of its core network in what might sound like the sort of news that appeals only to techies, but it will open the door to a host of new services to be pumped down your phone line.
BT is embracing the technology behind the internet - internet protocol or IP - and scrapping its legacy phone system, which has essentially not changed for decades. The new network will treat both voice and data calls in exactly the same way, enabling "converged" services such as the Bluephone integrated mobile and fixed line telephone.
The company's network chief, Paul Reynolds, described the £9bn five year roll-out of its 21st-century network - as BT has nicknamed it - as "among the most important and ambitious infrastructure transformation programmes in communications anywhere in the world".
With its range of broadband offerings, BT already has services based on IP but, later this summer, the company will start to roll out a new generation of products that show what it will be able to do with the new network. Starting with the most basic service, internet telephony - or Voice over IP - BT will move towards services ranging from stereo voice calls for those who love the sound of their own voice to a full video-on-demand service next year.
Mike Galvin, BT's director of internet operations, believes that as communication devices get smarter, the new network will hand control back to the customer. Instead of replying to an email with another email, why not video call the sender or text them? It will all be possible at the push of a button or click of a mouse.
"Personal communications is going to become just that: personal to the individual themselves," he says. It will change customers' perceptions of telecommunications, "in the same way as the switch between the public railway system to car ownership has changed people's ideas about travel".
For BT, the 21st-century network is also about saving money, according to Mike Cansfield, research director at Ovum. "Is this just a network upgrade or is it a big shift? I think, in the end, it is a big shift. What BT could have done is stop spending on its network. But they are not doing that because they recognise that the technology is there to fulfil a dream they have had for a long time, to collapse the multiple networks they have into one."
The company is not alone in switching to an all-IP network. Telecom Italia is carrying out the preliminary work on a similar switch; France Telecom, which has seen its core domestic market attacked by new entrant Iliad - offering consumers multi-channel TV, video on demand and 2MB broadband - is also looking at migrating its network; while in the US, both AT&T and Time Warner Cable have launched VoIP services.
So what services will the new network allow BT to produce? The starting point is VoIP. Already, there are a host of new telephony companies using the internet for voice calls. Skype, Vonage and Packet 8 are prob ably the most well known, while in the UK, GossipTel launched a few weeks ago, and another entrant, Zoom-Hayes, is preparing to launch later this month. Services range from free calling to other customers on the same service - Skype - to flat rate calling plans across whole continents using a geographically specific phone number that can be plugged in anywhere in the world - Packet 8.
BT's first VoIP product, BT Communicator, is expected next month and is a mix and match of existing services. It will allow free calls to other BT Communicator customers, while calls outside the IP network will cost the same as they would on a basic BT Together package. It will be PC-based, with calling done through a contacts book similar to the one used by Skype, meaning users can call names rather than numbers.
BT's Galvin explains that while VoIP is an easy first step, it is not an end in itself. "VoIP is effectively using a technology with a lot of potential to emulate what the old analogue technology can do. But it can do a lot more than that. We start off with VoIP because it is what people can understand."
BT is experimenting with 3D images and computer-generated characters or avatars, opening up the possibility of telephone calls expanding beyond the aural environment and into the visual world.
Towards the end of the year, the company will launch its Bluephone, which works as a mobile phone when the user is on the move and as a fixed line phone when at home.
"Bluephone is an excellent example of convergence where bringing two technologies together brings you more than either technology on their own," explains Galvin.
As 2005 approaches, BT will also launch a suite of products aimed at digital content - called BT Rich Media - which will help everyone from film studios to local football clubs put video clips on the web and collect a fee for download.
"While these services make use of the existing local broadband access network, as BT upgrades its backbone to IP, the breadth of services it can offer will increase," says Galvin. "I talk in terms of capabilities. What you will see in technical terms is more bandwidth, and that means more information and convergence of communications, so they work together in a way they don't now."
