BTwatch
This release
: #300
November 2018: 106pp
Releases/year: 10+
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Executive brief

Group

Management Update: New CEO Jansen completes BT’s tough trinity [p.6]

  • du Plessis welcome highlights Jansen qualities
  • New triumvirate may sweep away old BT
  • Key appointment for BT Board

H1FY18‑19 results: Patterson reports progress as he edges towards door [p.11]

  • Financials: cost‑cutting puts a positive spin on ongoing shrinking
  • Investment rising, with ESN peaked
  • Lowth promotes stability, while pension still looks rocky
  • Table: Divisional round‑up
  • FT hints at BT‑DT deal on the QT, but BT down the list of DT global domination plans…

Acquisitions and disposals: Stemmer offloaded to Bechtle in Germany [p.18]

  • Italian asset sale could be moving closer

Regulatory: Ross calls for outcomes focus in new world of regulation [p.20]

Table: People movements [p.22]

BTwatch #300

BTwatch 300: Change is a constant [p.26]

  • Timeline: A brief history of BT

BT TSO

Networks: Wind River flags trials on the edge with BT [p.34]

  • BT collaborating widely on edge development

Up close and personal — insight into BT’s run-up to 5G [p.38]

  • Automation improving service now, and a foundation for future
  • Traditional metrics no longer fit for purpose
  • Three transformation goals backing four use cases, ultimately enabling 5G
  • Technology change needs cultural change
  • Ericsson already ensconced in intelligence drive

Partners: BT–Juniper Innovation Day [p.42]

  • Twenty years on: Juniper envisions Networking 3.0
  • Juniper positions itself to help operators pivot
  • Networking 3.0: hyperscale NGN
  • Cultural change and keeping people on board
  • BT’s advantage in driving the 5G network to the edge

Suppliers: Group adopts WeDo assurances on EE success [p.49]

  • BT spreading assurance work around

Telecom Infra Project: BT embraces TIP as faithful gather in London [p.51]

  • Smaller vendors cleaning up in a vacuum
  • Watson on vRAN, and the spirit of innovative co‑operation
  • Sutton advocates commodification, but recognises perils
  • TEAC UK class of 2018: BT focuses on rural and intent
  • Table: Telecom Infra Project Ecosystem Acceleration Centre cohorts, 2017–18

Consumer

5G: Cities named as EE switches on first UK 5G live trial [p.64]

  • Docklands 5G show
  • Gritty East End reality follows
  • Dense urban locations to see first 5G benefits
  • Table: EE’s planned 5G locations for 2019
  • Three UK accelerates to launch 5G in 2019

ESN: Airwave gets three more years, but ESN to launch in 2019 [p.69]

  • EE keeps own counsel as new deal evolves
  • ESN to arrive with baby steps not a big bang
  • Kodiak to have its moment
  • PAC keeping up the pressure

TV: BT and Sky deepen content-supply deal in UK and Ireland [p.74]

  • EE in talks to offer customised Apple TV STBs

Enterprise

InLinkUK: WCC deals the latest obstacle to InLink rollout [p.78]

  • New York City underlines InLink potential

Media: BT extends next-gen OB network beyond Premier League [p.81]

  • 5G developments to boost mobile broadcasting

Partners: BT Enterprise toys with VR learning [p.83]

Global Services

Dynamic Network Services: Google Cloud trumpeted as BT Connect partner [p.85]

  • Global Services to offer Riverbed’s visibility-as-a-service

BT Security: BT anticipates AI and quantum security with a human touch [p.88]

  • Quantum akin to a nuclear arms race
  • IoT another Pandora’s Box
  • Cognitive AI to merge with human mind for the bigger picture

Openreach

Management update: McTighe cosies up to Sky; echoes Virgin as common enemy [p.92]

  • Openreach’s new pals may cause tension at home

Fibre: Openreach steps up race to connect new homes [p.98]

  • Pressure from rivals with CityFibre on the rise

Further reading

Index

Symbols

6WIND 35
21st Century Fox
- Sky
-- NOW TV 74

A

Accelleran 35, 52, 55, 61
Accenture 52
Activ Financial 87
ADVA Optical Networking 35, 52, 54
Akamai 35
Amarisoft 55, 62
Amazon 35, 76, 85
- Amazon Web Services 35, 85
Apple 10, 44, 76, 102
- Apple Music 44
- iPhone 10
Arqiva 78
Artesian Solutions 80, 102
Athonet 34, 35, 62, 101
AT&T 45, 71, 76
Autonomy 62

B

Bain Capital 8, 61
Bechtle Group 18, 19
- Stemmer 18, 19, 101
Bell Canada 55
Berenberg 9
Bharti Group
- Bharti Airtel 52, 55
BlackBerry 23
BMV Group 87
Broadband Delivery UK (BDUK) 13, 96
BT Group 6, 7, 8, 10, 11, 12, 13, 15, 16, 17, 19, 20, 22, 23, 24, 26, 34, 36, 38, 49, 51, 54, 65, 82, 92, 97, 100, 101
- Asia
-- Tech Mahindra 52
- BT Consumer 10, 11, 22, 26, 65, 68, 74, 76, 93
-- BT Cloud 85
-- BT TV 74
- BT Enterprise
-- BT Business & Public Sector 23
-- BT Fleet 17, 22
-- BT Ireland 23, 79, 102
-- BT Local Business 80, 102
-- BT Media & Broadcast 81, 82, 102
-- BT Northern Ireland 23
-- BT Wholesale & Ventures 23
-- InLinkUK 78, 79, 102
- BT Global Services 7, 8, 11, 12, 14, 15, 18, 22, 23, 26, 36, 84, 85, 86, 87, 103
-- BT Americas 23
-- BT Connect 85, 86, 87
-- BT Federal 23
-- BT Germany 18
-- BT Italia 8, 18, 19, 101
-- BT Radianz 87
-- BT Security 23, 88, 89, 103
- BT Retail 23
- BT Technology, Service and Operations 33, 101
-- 21CN 66
-- Adastral Park 42, 43, 88, 97
-- Azure 85
-- Brightstar 36
- BT Tower 59
- Directors
-- du Plessis, Jan 7, 11
-- Hoettges, Timotheus 17
-- McTighe, Mike 92
-- Rake, Sir Michael 7
- EE 7, 10, 12, 13, 14, 22, 34, 35, 36, 38, 39, 40, 41, 49, 60, 64, 65, 66, 67, 68, 69, 70, 71, 72, 76, 82, 102
-- Emergency Services Network 13, 69, 102
- Enterprise
-- BT Cables 17
- Executives
-- Ainger, Chris 82
-- Ali, Farhan 23
-- Allera, Marc 12, 14, 65, 76
-- Artley, Jennifer 23
-- Azvine, Ben 88
-- Black, Jim 22
-- Black, Kev 22
-- Burger, Bas 18
-- Canham, Rachel 22
-- Chalmers, Sabine 22
-- Cheung, Kwok 23
-- Crane, Paul 60
-- Cuevas, Maria 35
-- Dick, Brendan 23
-- Dunn, Jon 23
-- Foster, Alexandra 23
-- Frangos, Jean-Marc 60
-- Gasson, Kim 83
-- Guest, Richard 22
-- Higham, Rachel 36
-- Jansen, Philip 16, 23
-- Jones, Gavin 82
-- Karonis, Fortis 65
-- Key, Matthew 10, 101
-- Lancaster, Sharon 22
-- Lowth, Simon 7, 13, 15
-- Marquis, Simone 22
-- McCall, Greg 65
-- McQuade, Gerry 12, 14, 23
-- McRae, Neil 42
-- Meyer, Mairead 23
-- Mitchell, Andrew 23
-- Patterson, Gavin 6, 7, 11
-- Risse, Nadja 23
-- Ross, Cathryn 20, 101
-- Salam, David 38
-- Selley, Clive 7, 15, 93, 100
-- Sinha, Priya 22
-- Sloman, Carla 23
-- Sutherland, Graham 23
-- Sutton, Neil 85, 87
-- Ward, Conor 22
-- Watson, Howard 7, 36, 51, 52, 56, 65
-- Wellen, Tony 23
-- Whale, Andy 95
-- Woodend, Roger 23
- Ex-executives
-- Fitz, Daniel 22
-- Hanif, Mansoor 60
-- Hughes, Mark 23
-- Timmons, Emer 36
-- Varley, Wray 23
- Openreach 7, 8, 9, 11, 12, 13, 15, 16, 17, 21, 23, 24, 26, 67, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 103

C

Cambridge University 88
Centrica 22
Channel 4 76
Ciena 54
Cisco Systems, Inc. 52, 54, 60, 61, 87
CityFibre 99, 103
CK Hutchison 36, 67
- Three Group
-- Three UK 36, 67, 102
Comcast 93
Conservative Party (UK) 100
Credit Suisse 19

D

Deloitte 52, 55
Department for Digital, Culture, Media and Sport (DCMS, UK)
- Broadband Delivery UK (BDUK) 11, 13, 15
- Hancock, Matt 100
Deutsche Telekom 16, 51, 52, 55, 59, 60, 61, 62, 101
- Magyar Telekom Nyrt 54
- T-Mobile 38
Digital Britain 98, 100, 103

E

Eir 75, 102
Ericsson 38, 41
European Broadcasting Union (EBU / Union Européenne de Radio-Télévision / UER) 82
European Union
European Commission 24

F

Facebook 51, 53, 54, 55, 59, 60, 61
- OpenCellular 53
- Open Compute Project 60
Financial Times 16
Football Association
- Premier League 75, 81, 82, 102
Francis Crick Institute 22, 23

G

Gigaclear 99
Goldman Sachs 99
Google 85, 103
Government Communications Headquarters (GCHQ, UK) 36
GTT 87
- Interoute 87

H

Hewlett Packard Enterprise 54
High Court 13, 14
Home Office (UK) 69, 70, 71, 72, 102
House of Commons
- Public Accounts Committee 70, 71, 72, 102
HP Inc 54
Huawei Technologies 35, 36, 64, 65, 100
Hyperoptic 99

I

IBM 85
Infinera 54
InfoVista 85
Institute of Economic Affairs 20
Intel 52, 54, 55
IPS Institute 72, 102

J

Juniper Networks 42, 47, 48

K

KETS Quantum 59, 62
Kingston Communications (KCOM) 23, 99

L

Liberty Global
- Virgin Media 7, 68, 78, 92, 93, 99, 102
- Virgin Media Business 78
Lime Microsystems 52, 54
Lloyds Banking Group 13, 22
Lumina Networks 35

M

M&G Prudential 99
Microsoft 34, 85
Ministry of Defence (MoD) 89
Motorola 69, 70, 71, 102
Motorola Solutions
- Airwave 69, 70, 71, 72, 102
- Kodiak 69, 71

N

National Audit Office 71, 102
Netflix 76
Nokia 52, 55, 83, 87
- Nuage Networks 87
NTT 52, 54

O

Ofcom 17, 20, 21, 22, 24, 60, 68, 72, 95, 97, 100, 101, 102, 103
- PPC 24
- Price controls 24
- USO 20
Oracle 85
Orange 17, 38, 54, 55, 59, 62

P

Pace Micro Technology 93
Parallel Wireless 35, 52, 55
PHAZR 35
Phluido 55
Pirelli 95
Procter & Gamble 7
Prysmian 94, 95, 103
Pure Telecom 79, 102

R

RAVN Systems 50
Retelit 19, 101
Riverbed Technology 85, 86, 87, 103
Royal KPN 17

S

Salesforce 80, 85
Samsung 10
Scottish Football Association
- Scottish Premier League 82
SecureCloud+ 89
SK Telecom 52, 55, 59, 62
Spirent 35
Subex 50

T

TalkTalk Telecom Group 68, 99
Tech Mahindra 52
Telecom Infra Project 35, 51, 59, 60, 61, 62, 101
- OpenCellular 53
- TEAC 52, 59, 61, 62
Telecom Italia SpA 52, 55
Telefónica 10, 36, 51, 54, 55, 78
- O2 UK 10
- Telefónica Europe 10
TeliaSonera AB 17
Telstra 55
Transport for London
- London Underground 71
Twitter 38

U

UEFA
- Champions League 82
United Nations 19
Unmanned Life 62

V

Vela 87
Verizon Communications 76
Visa 101
Vodafone 12, 21, 23, 51, 54, 55, 60, 61, 68, 72, 99
- UK 68, 72
VRtuoso 83, 102
VXFIBER 99

W

WeDo Technologies 49, 101
Wind River 34, 35, 101
World Communication Awards (WCA) 36

Y

YouView 76

Z

Zeetta Networks 62
ZTE 36

  • BT’s regulatory lead is trying to change the conversation on telecoms regulation, towards a more technology‑neutral focus on outcomes.
  • Potential commitment towards more intensive investment remains the promise floated for a more congenial atmosphere.

While giving the annual Beesley Lecture for the Institute of Economic Affairs, Cathryn Ross, Director for Regulatory Affairs at BT Group, gave her take on the current state of the regulatory environment in the UK telecoms sector, and outlined the ways in which she believes it must change to address transformation in the industry.

Ross suggested telecoms regulation is at a pivotal moment, and that “there is a sense that continuing to do what has been done in the past won’t deliver against the challenges the sector faces going forward”, adding there are four key elements that will need to feature:

 

  • A focus on outcomes. While acknowledging the importance of fibre, and the inevitable transition to fibre‑to-the‑premises, Ross suggested there is currently too much focus on the technology, and not enough on the services end users want and need. The comparatively low level of superfast services uptake was used to illustrate this gulf; Ross noted that while 93% of consumers could access superfast broadband, only 40% of customers in covered areas had chosen to do so. The BT regulatory chief also referenced BT’s latest Universal Service Obligation offer, and suggested Ofcom should be more willing to consider a technology-neutral means of providing the level of coverage it desires for the entire population; and fixed‑wireless access features in BT’s latest offer (see separate report).
  • Ensuring outcomes are based on customer engagement. Ross believes closer attention to customer preferences complements an outcome focus, and ensures regulated companies are working towards meeting customer needs. From her water sector experience, she is convinced that incentivising companies to better understand customers results in better service. Encouraging engagement is seen as a more progressive way forward than enforcing minimum service level requirements as is currently the case, warning that these types of minimums quickly become norms and discourage ongoing improvement. For customers beyond the more populated areas of the country, the role of government intervention in ensuring “fair” coverage and service provision was emphasised by Ross, who recognised the limits of nationwide services based on commercially viable rollout models. In this regard, Ross had warm words for the current government’s approach and the work underway through the Future Telecoms Infrastructure Review (BTwatch, #297).
  • Rebalancing the role of competition and regulation in achieving goals. Ross noted that competition at end‑user level is “pretty fierce” and likely to intensify as convergence develops. Echoing a view that is gathering momentum among European incumbents, she suggested regulators are overly fixated on regulating the means by which telcos deliver services, and not considering the overall market for the types of services that are being provided, thereby missing the impact on competition of over‑the‑top services. A different approach is also needed at infrastructure level, according to Ross, with cable and fibre altnets growing. She further reminded the audience that competition at the retail level applies indirect pressure at the wholesale level, meaning Openreach customers expect to be able to offer services at prices that are broadly level with wireless or cable alternatives. Ross also warned of regulation entailing Openreach being pushed to invest in services on a ‘build it and they will come basis’, particularly if it is not allowed to have a lengthy spell of price control‑free sales to ensure a ‘fair bet’ investment that takes into account any lag between the operator’s initial investment and demand for the service ultimately gathering speed.
  • Rethinking the relationship between the regulator and business to foster a more collaborative approach. Ross is in favour of co‑creation of solutions for regulatory challenges with all stakeholders proactively engaging. Recognising the tendency for relationships between the regulator and the regulated to become adversarial, Ross called for a more collaborative approach with both sides identifying the goals that need to be achieved, and attempting to find a way forward with a more consultative approach. She did, though, also note that, based on her experience of leading Ofwat, “regulation is not a job for people who like to be liked”. Beyond the regulator-versus-regulated conflict, Ross also hoped to find a way to end the jockeying for position that can occur between telcos negotiating deals, with parties mindful that, if they cannot reach agreement, Ofcom will be called in. According to Ross, this expectation of intervention undermined good faith negotiations with both sides manoeuvring for a regulatory endgame — BTwatch has noted in the past that BT and Vodafone appear particularly partial to taking pot‑shots via the regulator.

Ross’s firm but conciliatory views on the future of regulation are set to be tested in future months, as discussions with Ofcom continue on subjects such as the investment ‘fair bet’, and BT’s willingness to support universal coverage and improved service levels. Further consultation documents from Ofcom are expected by the end of 2018, and will give an early indication of the effectiveness of the new approach.

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