BTwatch Report #221 April-May 2011 Executive Brief
22 June 2011
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- BT Group released its results for the FY10-11 financial year, with an unexpectedly sharp dip in revenue, but continued progress on profitability. Pension fears also continue to be allayed, and the company remains soundly managed fiscally, but there remain concerns as to where promised growth will to come from. While BT is minimising the impact from declining legacy services, and playing up prospects for further efficiencies, compelling evidence of a trend in new services revenue growth has yet to emerge. [pp.4-18.]
- BT was publicly sceptical about the potential for Fujitsu to deliver on plans for a fibre-to-the-premises network covering rural areas of the UK, although it also officially welcomed the help in the heavy lifting of network rollout. In an interview with BTwatch, Andy Stevenson, Fujitsu Telecom Chief Executive, set out a defence of the business case behind the initiative, and maintained that its relationship with BT need not be impacted by the vendor’s entry into a strategy of “co-opetion”. [pp.20-26.]
- Fujitsu was also among a group of BT network rivals, featuring Geo, TalkTalk, Virgin Media, and Vtesse, that wrote to the government expressing disquiet at Openreach pricing proposals for physical infrastructure access (PIA) to enable fibre deployment. The group also wrote to Ian Livingston expressing its concerns, with BSkyB lending its name to the letter; and the BT Chief Executive called for more constructive participation from the signatories. The satellite company may be concerned about pricing, but, alongside niche ISP Call Flow, it is also participating in a three-month test of the Openreach PIA offering. Ofcom is considering intervening in the rumbling PIA dispute. [pp.65-67.]
- BT announced a research and development partnership with Chinese vendor ZTE, to jointly develop standards for next-generation fixed, mobile, and wireless communications systems, with a particular focus on convergence and interoperability. The link with ZTE follows on from the announcement of an agreement to work with mobile network Everything Everywhere, and vendors Huawei and Nokia Siemens Networks, on LTE trials in Cornwall to test the capabilities for fixed-wireless broadband services. The deals with cellcos and vendors both highlight BT’s embrace of the need to leverage its existing network assets to serve increasingly important service provider customers at BT Wholesale, and reflect the need for the telco to regain the upper-hand when claiming it is leading innovation on next-generation access rollout. [pp.29,59-60.]
- The National Audit Office reviewed spending on the NHS National Programme for IT, with BT Global Services emerging relatively unscathed thanks to earlier efforts to address its problems with the project. While there was some sabre-rattling around the prospect of cancelling the project altogether, there may yet be further opportunities for BT in resolving current problems with the initiative. [pp.46-51.]
- BT Group saw the majority of the grounds for its judicial review of the Digital Economy Act rejected by the High Court. BT, along with rival TalkTalk, which had joined the attempt to block the Act coming into law, requested the decision be considered by the Court of Appeal. [p.27.]
- BT is working with Irish IT companies Amartus, Intune Networks, and Openet on a liquid bandwidth project that is part of the TM Forum Catalyst programme, and is hoped to improve capabilities for bandwidth-on-demand. [p.19.]
- BT Retail pointed to another strong quarter on broadband sales, but, while BT Infinity fibre uptake is improving, BTwatch considers the division’s figures, and those from the wider retail sector as a whole, to raise questions as to why anticipated widespread consumer demand for fibre is not translating into more rapid adoption. [pp.31-34.]
- BT Retail is to deploy a new customer care management tool from Alcatel-Lucent’s Motive subsidiary, which is intended to facilitate support for bundled offerings, potentially including IPTV and VoIP. BT Broadband will be offering more value-added services from late-2011, with the OnLive cloud gaming service expected to exclusively debut in the UK with BT in the autumn. [pp.35-36.]
- BT Engage IT is in the midst of a recruitment and promotional drive, as BT Retail attempts to grow its business providing IT services to SMEs. [p.37.]
- BT Ireland is to provide a backbone fibre network supporting expansion of 3 Ireland’s mobile broadband network capabilities. The £33m deal is expected to enable the operator to provide connection speeds of up-to-100Mbps. [p.40.]
- BT Global Services claimed it had a strong end to the financial year for contract wins, and is aiming to see its annual order book reach £8bn from its current £7.3bn runrate. While expansion in Asia-Pacific has garnered the most attention over the past year, performance in Latin America suggests earlier investments in the region are beginning to reap reward. Additionally, BT recently highlighted potential to expand in Africa and the Middle East. Global Services was also seen to be pursuing its industry verticals drive, which is working in unison with a regional push, through promotion of deployment of its solutions within the pharmaceutical sector. [pp.41-42,54,55.]
- BT Group signed a Deed of Undertaking with the UK government that will see BT Wholesale become a key supplier of conveyance network services, as part of a project to create a secure private internet. BT Global Services is to be among the group of approved service providers able to offer local authorities solutions using the network. Global Services also signed a framework agreement with the Scottish government for the provision of managed services to the body, and provided more information on a previously-flagged £400m deal with Lancashire County Council. [pp.44,45.]
- BT launched BT Onevoice featuring Microsoft Lync in Asia-Pacific. The telco’s converged communications platform now features the IT giant’s collaboration and communications services, which are said to be particularly well suited to the varying degrees of technology adoption across the region. A rollout in North America is expected in the near future. [p.53.]
- BT Wholesale’s business continues its gradual transformation, and Ian Livingston boasted that the division stands apart from many of its traditional European peers. However, there is still much to be done, as evidenced by the highlighting of the wholesale business having successfully completed a period of playing catch-up on Ethernet services. [pp.57,59.]
- Video production company Aframe flagged the benefits of BT Wholesale Ethernet products for online collaboration on media projects. BT Agilemedia announced integration of its Online Participation Media platform with social-networking site Facebook. Incorporation of the platform, which is used for voting on popular television talent shows, is expected to enable real-time online voting using Facebook‘s virtual currency. [pp.60,62.]
- Openreach spending on its fibre rollout is said to be on track, although there are signs that operations could be run more efficiently and cost reductions accelerated at the access services division — something likely to be a priority for the unit’s new Chief Executive. To address the need to rapidly address pockets of unexpected demand for services, and support the fibre rollout, a phalanx of ex-armed forces personnel are to be drafted by BT in engineering roles. [pp.63-65,69.]
- Openreach is proposing changes to spectrum allocation for fibre services, which it claims could see the headline speeds for fibre-to-the-cabinet double. [p.68.]
About BTwatch
Report: 221
Covering: April-May 2011
Published: June 2011
Next report: July 2011
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