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BTwatch, issue 2009.08 snapshot

20 October 2009

Issue: 2009.08
Covering: mid-September to mid-October 2009
Published: October 2009
Next issue: November 2009

Mapping the activity and strategy of the UK’s largest telco. A unique monthly report for the industry.

EXECUTIVE BRIEF

  1. MAIN STORIES: BT is rumoured to be discussing at board-level a bid to acquire broadcaster ITV. While it could be just a rumour sparked by BT Non Executive Director Tony Ball being linked to the Chief Executive role at ITV, BTwatch considers there could be logic in a tie-up, if BT is willing to spin-off its Retail consumer business into a new entity alongside the television assets, to create an unshackled media player, in the hope of replicating the striking success of BT’s last spin-off, O2. [p.3.]
  2. BT announced it is increasing its target for the number of sites to be passed by its fibre-to-the-premises network by the end of 2012, from one million to 2.5 million. The increase, which does not affect the telco’s overall target of having ten million sites with access to some form of fibre network, appears to have been driven by a need to reconsider FTTP testing in the wake of the collapse of the construction industry and, BTwatch suspects, due to communication provider customers of both Openreach and BT Wholesale showing significantly more ambition than BT itself. [pp.30-34,36.]
  3. Ofcom is lifting regulatory restrictions on BT’s pricing of narrowband telephony products, opening the door for BT to more aggressively price and market bundles of previously price controlled fixed-line services to consumer and business customers. While BT promised a “price war” BTwatch suspects the relaxation of regulation will principally benefit defensive plays. [pp.10-11.]
  4. BT Wholesale announced a five-year managed services contract to provide the fixed-line element of a converged communications solution for SME customers, to be launched by Telefónica O2 UK. BT will also design, manage, and operate a dedicated order portal and service management centre for O2 sales teams. [p.27.]
  5. BT GROUP: BT saw its credit rating upgraded by Credit Suisse on expectations of further cost-cutting and a mid term revenue growth. The broker suggested that BT may ultimately have to consider the fairly radical step of compulsory redundancies. [p.4.]
  6. STRATEGY & OPERATIONS: BT signed an MoU for a strategic cooperation with the School of Economics and Management at Tsinghua University in Beijing. During a forum in Paris, BT networks senior executive George Nazi reiterated BT’s view that long-term commercial models where service providers pay for quality of service on network infrastructure are essential. [pp.6,7.]
  7. A business intelligence suite from JasperSoft is being used to support BT’s Statistical Data Warehouse, which is managed by Unisys. [p.7.]
  8. BT RETAIL: BT Television and Online services Chief Executive Marc Watson conceded — inevitably — that BT would not reach its target of more than two million BT Vision customers by the end of 2010, from its current base of fewer than 450,000. The admission was exploited as an opportunity to have another dig at BSkyB prices for its premium content, but there was also recognition that BT has failed to effectively demonstrate the value of the service to consumers. [pp.8-9.]
  9. An on-demand shopping channel was launched on BT Vision , offering a range of products in different shopping categories, which can be accessed and ordered around the clock. [p.9.]
  10. BT Retail continued to reject calls for alleged illegal file sharers to have their internet services withdrawn, in the face of accusations from the British Phonographic Industry that it is failing to act against lawbreakers to protect its own profits. BT described the action demanded as an abuse of legal rights, impractical, and disruptive to legitimate use of peer-to-peer services, as the telco attempts to rebuild its privacy credentials following the Phorm debacle. BT also teamed with the Trading Standards Institute to call for stronger action on “slamming“, shortly after Ofcom unveiled proposals for a tougher code of practice. [pp.13,16.]
  11. BT Business continued to build its range of services in the search sphere, with the launch of BT SearchSmart, a search engine marketing service for SMEs operated in conjunction with search agent Latitude. BT’s support for the supposed “21st century business card” .tel domain was highlighted by Telnic. [pp.14,15.]
  12. BT GLOBAL SERVICES: Ex-Getronics executive Rogier Bronsgeest was named as President of BT Global Services’ Customer Service Operations, and will also sit on the BT Operate Executive Board. [p.17.]
  13. Analysts Ovum placed BT Global Services at the top of its Enterprise Strategy Scorecard , praising the division for its customer service and product innovation. However, rivals were close on BT’s heels. [pp.18-19.]
  14. BT won a two-year contract to provide IT helpdesk and support services to the Manpower employment services business, in Australia and New Zealand. [p.19.]
  15. Liverpool Direct Limited, the BT public private partnership with Liverpool Council, was criticised in a report that suggested the finances of the venture are still unclear, eight years after its launch. [p.20.]
  16. BT is said to be in talks with Indian energy company PowerGrid, with a view to using its fibre-optic network as an alternative to traditional network suppliers, for its multinational corporation customers on the sub-continent. [p.21.]
  17. Local operator EXATEL was named a BT Alliance member in Poland. BT highlighted its 20 years of operations in the Spanish market, which has seen the local BT unit grow to report annual revenue of EUR500m, tens of thousands of business customers, and a position as the main challenger in the country’s enterprise data transmission market. BT also indicated it is seeing continuing success in its biggest market outside the UK — Italy — with significant contracts with BNP Paribas and Fiat recently renewed. [pp.21,22.]
  18. BT Benelux launched a Carbon Impact Assessment service that considers the contribution of networked IT services to carbon emissions, and offers practical solutions to reduce energy consumption. New business-continuity solutions were also launched over BT’s 21CN global platform. [pp.24,26.]
  19. eIQnetworks was selected to provide security monitoring and reposting services for BT iNet’s LAN customers. Storage solutions provider NetApp trumpeted its role in the new BT Virtual Data Centre service, intended to act as a single hosted platform for corporate customers’ IT resources. [pp.24,25.]
  20. BT WHOLESALE: BT Wholesale announced a new rollout target for its ADSL2+ network, which will see it extend its national footprint from an expected 55% in spring 2010, to 75%-coverage by spring 2011. The new goal will see BT reach in 18 months’ time where many of its competitors are now, in terms of rollout. BT Wholesale is also planning price cuts to encourage greater uptake of upgraded broadband services. [p.28.]
  21. OPENREACH: Openreach is extending trials of its Broadband Enabling Technology , which is a fixed-line solution delivering stable 1Mbps broadband speeds at distances of up to 12km from an exchange, and is believed to be in talks with the Scottish government on upgrading rural exchanges. [pp.29-30.]
  22. The ongoing dispute between Openreach and its engineers over working hours saw reports that the access services division is to call in contract workers after employees rejected proposals agreed upon by BT and the Communication Workers Union. [p.36.]

EXTRACT

BT linked to ITV bid

There were rumours that BT Group is considering a bid for broadcaster ITV. Reports stemmed from a Sunday Express newspaper article citing unnamed insiders as suggesting the possibility is being discussed at board level at BT.

While BT remains in a weak position financially, the prospect of the company raising funds has been raised, although getting its house in order is more likely the priority rather than an acquisition (see separate report). The presence of BSkyB as a shareholder could also make a BT bid unlikely to be successful.

The speculation regarding a BT bid for the broadcaster, which has a market capitalisation of around £2bn, could have been fuelled by the presence of Tony Ball as a BT Non-Executive Board member. Ball, a former BSkyB Chief Executive, has been linked with the vacant Chief Executive role at ITV.

Tony Ball had been thought to be close to signing a contract to become ITV Chief Executive, but negotiations apparently stalled on terms and conditions.

Could a deal be beneficial to BT as a group?

While BT, like many telcos, has a questionable record in managing content, the acquisition could put the company on a stronger footing to compete with BSkyB and Virgin Media in UK consumer markets through control of ITV content.

Rather than an acquisition that would see ITV become part of the BT Group, another possible scenario, in BTwatch’s view, could be the creation of a new entity merging the consumer element of BT Retail and ITV to form a new, retail- and content-focused UK converged communications player, with its own independent management and focus.

The spinout of O2 Group during BT’s last financial crisis demonstrated what a sluggish under-performing consumer business could do when liberated from the demands of being part of a regulated incumbent; and it could be that BT management are pondering whether the same trick can be repeated. This would leave the stripped back BT to focus on access services through Openreach, managed services through BT Wholesale, and developing a viable long-term IT services and international networks business through the troubled Global Services unit.

While regulators and the government might even welcome such a move, in propping up ITV and creating a more viable national champion, pension liabilities could prove a huge hurdle.

[Further reference: BT considering bid for broadcaster ITV - report -- DM Europe, 8 October 2009; BT rumoured to be reviewing the option of buying ITV -- SimplifyDigital.co.uk, 5 October 2009; BT targets ITV takeover -- Sunday Express, 4 October 2009; Talks stall over top job at ITV -- Financial Times, 10 September 2009.]

TABLE OF CONTENTS

3 BT Group

3 Acquisitions and disposals
3 BT linked to ITV bid
3 Could a deal be beneficial to BT as a group?
4 City reports
4 Community
4 BT awards laptops to community projects
4 “…out of context…”
4 Rake on Ian Livingston and BT turnaround
4 Brokers’ reports
4 Credit Suisse upgrades BT
5 Regions
5 New South-West region head named
5 Tech Mahindra
5 Environment
5 BT holds exhibitions for “Wind of Change” project
6 Appointments
6 Executives
6 Fibre
6 Strategy and operations
6 Research
6 BT signs MoU with Tsinghua University
6 Ribbit
6 Ribbit to develop for Google Wave
7 Suppliers
7 BT suppliers feature in TechTrack 100
7 Strategy
7 BT opposes net neutrality
7 BT and Unisys select Jaspersoft

8 BT Retail

8 Advertising
8 Appointments
8 BT Television Services
8 Watson accepts BT Vision targets unreachable
8 BT accepts the inevitable
9 Broadband
9 BT Government
9 Echoes of BT Fusion marketing woes
9 BT Vision launches shopping channel
10 Pricing and tariffs
10 Ofcom narrowband ruling lifts ban on BT bundles
11 Community
11 Rivals unhappy with ruling, observers expect better value
11 BT promises “price war”, BTwatch yet to be convinced
11 Ofcom to conduct further work in unresolved areas
13 Competitors
13 Virgin Media considers VDSL2 rollout
13 Privacy
13 BT criticises file-sharing bans again, as BPI slams BT
13 BT pursuing the sensible PR approach this time
14 BT Business
14 BT Business launches SearchSmart
15 BT Business launches “Business Pulse” survey
15 Telnic highlights BT Business .tel support
15 BT Ireland
15 BT criticises Eircom court action
16 Regulatory
16 BT calls on Ofcom to tackle “slamming”

17 BT Global Services

17 Appointments
17 BTGS appoints Bronsgeest to customer service role
18 BT Global Financial Services
18 ELX links to Radianz infrastructure
18 BT closer to closing RadianzNet
18 Awards and accreditations
18 Ovum rates BTGS as “global leader of global leaders”
19 BT Health
19 Report not as rosy as it may first appear…
19 Contracts
19 BT wins two-year Manpower contract
20 Public sector contracts
20 LDL joint venture under fire
21 BT International: Europe
21 Virtual data centres planned for Italy
21 BT International: Asia
21 BT in talks with PowerGrid for broadband capacity
21 EXATEL named BT Alliance partner
22 BT highlights 20 years in Spanish market
22 BT renewing contracts in Italy
24 BT Benelux launches Carbon Impact Assessment service
24 BT iNet
24 BT iNet Selects eIQnetworks for security monitoring
25 Partners
25 NetApp trumpets virtual data centre role
26 Products and services
26 BT offers new business-continuity services

27 BT Wholesale

27 Managed services
27 Contracts
27 BT wins O2 contract for launch of SME fixed-line service
28 Products and services
28 BT to extend ADSL2+ footprint to 75% of country

29 Openreach

29 Customers
29 Union Street heralds 100th WLR3 order
29 Broadband
29 Openreach launches extended BET pilot
30 Fibre
30 TalkTalk joins fibre trials
30 murphx trumpets fibre trial role
30 BT in talks with Scottish authorities on exchange upgrades
30 BT accelerates fibre-to-the-premises plans
32 Suppliers
32 Carillion confirms BT contract
32 Lower costs enabling the rollout…
32 …but public funds still important
33 BT Wholesale customers driving demand?
33 Analyst reaction
34 Openreach announces FTTP trial sites
34 Communications provider private investment pondered
35 BT sets out FTTC timeline
36 Openreach provides FTTP pricing details
36 Employment
36 Hours dispute sees Openreach consider contract staff
37 OTA2
37 OTA2 updates for September 2009

38 Index

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  • Below is a free taster from issue 2009.08 (September-October 2009), including an Executive Brief, Extract, Table of Contents and Index, giving a valuable snapshot of the full report.

INDEX

A
ACCA, 15
Advertising Standards Authority, 8
AT&T, 19
B
Baan Company, 17
Bharat Sanchar Nigam Ltd (BSNL), 21
Bharti Group
- Bharti Airtel, 21
BNP Paribas, 22
British Broadcasting Corporation (BBC), 8, 13
British Chambers of Commerce, 15
British Phonographic Industry, 13
BSkyB, 3, 8, 9, 10, 11
BT Group, 3, 4, 5, 6, 7, 8, 10, 19, 30
- Asia
- Tech Mahindra, 5
- BT Community Connections, 4
- BT Global Services, 3, 4, 6, 17, 18, 19, 20, 21, 22, 24, 25, 26
- BT Asia Pacific, 19
- BT Benelux, 24
- BT Frontline, 19
- BT Global Financial Services, 18
- BT Health, 19
- BT iNet, 24
- BT International, 21
- BT Italia, 21
- BT Radianz, 18
- BT Spain, 22
- Liverpool Direct Limited, 20
- Next Generation Contact Centre, 26
- RadianzNet, 18
- Spain, 22
- Virtual Data Centre, 25
- BT Innovation & Design
- Ribbit, 6
- BT Retail, 3, 8, 9, 10, 11, 13, 16, 35
- 1571, 7
- BT Business, 8, 14, 15, 35
- BT Fusion, 9
- BT Government, 9
- BT Ireland, 11, 15
- BT Local Business, 14
- BT SearchSmart, 14
- BT Tradespace, 15
- BT Vision, 8, 9
- Business Pulse, 15
- Terminate the Rate, 10
- BT Wholesale, 3, 5, 7, 27, 28, 29, 33, 35, 36, 37
- Wholesale Broadband Connect, 28
- Directors
- Ball, Tony, 3
- Rake, Sir Michael, 4
- Executives
- Alvarez, Luis, 22
- Bronsgeest, Rogier, 17
- Burger, Bas, 24
- Campbell, David, 34
- Cavestany Vallejo, Jacinto, 22
- Clark, Chris, 15
- Davis, Sally, 27
- Gayle, Andre, 7
- Karlowski, Pawel, 21
- Lalani, Hanif, 17, 18
- Livingston, Ian, 4
- Martin, Tom, 5
- Murphy, Bill, 14, 15, 35
- Nazi, George, 7
- Parker, Craig, 25
- Patterson, Gavin, 10
- Petter, John, 13, 16
- Ramji, Al-Noor, 6
- Rejali, Cameron, 28
- Reynolds, Jon, 5
- Robertson, Steve, 30, 32
- Sciolla, Corrado, 21
- Small, John, 29, 32
- Steed, Jacqueline, 6
- Sutcliffe, Graham, 24
- Sutton, Neil, 26
- Taylor, Kevin, 19
- Watson, Marc, 8
- Williamson, George, 32, 34
- Ex-executives
- Bross, Matt, 6
- Martinet, Mark, 8
- Scleparis, Stratis, 8
- Openreach, 3, 13, 29, 30, 32, 33, 34, 35, 36, 37
- Broadband Enabling Technology (BET), 29
- Ebbsfleet, 34
- ISDN2, 11, 29
- ISDN30, 11, 29
- WLR3, 29
- Strategy and Operations, 6
- 21CN, 6, 7, 26, 36
- BT Innovation & Design, 6, 7
- BT Operate, 17
Business Link, 15
C
Carillion, 32
Carphone Warehouse, 10, 11, 30
- TalkTalk, 11, 30
Cisco Systems, Inc., 9
Commission for Communications Regulation (ComReg, Ireland), 15
Communications Workers Union, 36
Core Communications, 7
Credit Suisse, 4
D
Datamonitor, 27
Design Council, 15
Deutsche Telekom
- T-Mobile, 7
Digital Britain, 29, 32
DTV Services
- Freeview, 8, 9
E
eIQnetworks, 24
Eircom, 15
ELX Futures, 18
Entanet, 7
Environment
- Wind turbines, 5
Epsilon, 7
Etisalat, 5
EXATEL, 21
F
Fiat SpA, 22
Football Association
- Premier League, 8
France Télécom
- Orange, 7, 19
- Orange Business Services, 19
G
Getronics NV, 17
Google, 6, 14
- AdWords, 14
Growing Business, 15
H
High Court, 15
Huawei Technologies, 6
Hutchison Whampoa, 10
I
IBM, 17
International Electrotechnical Commission (IEC)
- Broadband World Forum, 7, 32
ITV, 3, 8
J
Jaspersoft, 7
K
Kingston Communications (KCOM), 11, 27
L
Latitude, 14
Level 3 Communications, 8
Liverpool Council, 20
M
Manpower, 19
Microsoft, 25
Morgan Stanley, 33
murphx Innovative Solutions Ltd., 30
N
NatWest, 15
NetApp, Inc. (Network Appliance), 25
NGCC, 26
O
Ofcom, 4, 8, 10, 11, 16, 34
- Carrier pre-selection, 37
- LLU, 15
- Richards, Ed, 10
- Wholesale line rental, 29
Office of the Telecommunications Adjudicator, 37
- OTA2, 37
Olympic Games, 15
Ovum, 11, 18, 19
P
Phorm, Inc. (121Media), 8, 13
Phyworks, 7
PowerGrid, 21
R
Rational Software, 17
Reliance Communications, 21
Royal KPN, 17
Rural Coalition, 6
S
SamKnows, 35
Saudi Telecom, 5
Setanta, 8
- Setanta Sport, 8
South Tyneside Council, 9
T
Tech Mahindra, 5
Technology
- ADSL2+, 28, 33
- Broadband, 4, 5, 6, 7, 8, 9, 10, 11, 15, 16, 21, 27, 28, 29, 30, 32, 33, 34, 35, 36
- CRM, 26
- Fibre, 7, 13, 21, 30, 32, 33, 34, 35, 36
- FTTP, 30, 32, 33, 34, 36
- IP, 9, 30
- ISDN, 10
- MPLS, 21
- Project Canvas (BBC, BT, ITV, FIVE), 8
- SMS, 7
- SOA, 6
- VDSL2, 13
- VoD, 9
- VoIP, 30
TechTrack 100, 7
Telefónica, 7, 22, 27, 33
- Telefónica Europe (O2), 3, 7, 27, 33, 35
- Mobile Data
- Revolution, 6
- UK, 27, 33
telent plc (Marconi), 32
Telnic, 15
Tesco, 14
The Royal College of Nursing, 10
Trading Standards Institute, 16
Tsinghua University, 6
U
Union Street Technologies, 29
Unisys, 7, 17
Unite, 10
V
Verizon Communications, 19
Virgin Media, 8, 9, 13, 30
Vodafone, 6, 7, 27, 33
Vtesse Networks, 13
W
Worldwide Group, 7
Z
Zeus Technology, 7

Written by AB · Filed Under KnowBT 

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