BT Home Hub launch: Just a big Ipod, or a point of control over your activities at home ?

BT have just launched their 'Total Broadband' home service (see bt.com/broadband). Based around an ipod-styled 'home hub', it provides a lot more than vanilla broadband, including :

• Home Wi-Fi access
• Videocalls
• Unlimited local and national voice calls
• Wi-Fi access at BT (and roaming partner) hotspots and at their forthcoming 'wireless cities' via BT's 'Openzone' service.

They are also offering a Wi-Fi internet radio and it looks from the press as though they are intending to offer home security (burglar alarm) functions, gaming and ultimately video on demand (about time too - they've been talking about this for at least 20 years).

The home hub itself is hugely significant. Although in essence it's just a customised router and access point, it acts as a point of control in delivering the bundle of services listed above, and thereby reduces customer churn for BT. If you like the set of services you are paying for, it's unlikely you'll find quite that set from any other provider (and the 12/18 month minimum contract term should help to hold onto you too). It also provides BT with an opportunity to upsell you on all sorts of add-on services in the future, too (I gather the software on the hub can be updated remotely by BT). Most importantly for BT, it lifts their service from the cut-throat, low-margin world of access-only broadband to being exactly where they want to be: a provider of differentiated, high-margin, 'sticky' services.

The inclusion of the Openzone minutes is also interesting. Until now the service has been very much targetted (and priced) for corporate users. Once suitable devices are made available, this will enable BT to offer you the same range of services anywhere you go within range of a hotspot. But, you might say, finding a hotspot is really hard work and they are hard to find compared with mobile phone networks coverage, which is available almost everywhere. Watch this space...