BTwatch Report #218 November-December 2010 Executive Brief
6 January 2011
.
Executive Brief from BTwatch, report #218. Click through for: an Extract from this month’s report; the Report Snapshot; or to contact us for more information about the full 56-page report, this industry standard monthly report service, and ongoing subscription access.
- BT Group expressed enthusiasm for working with the government to bring high-speed broadband to 90% of the UK by 2017, as the telco expressed willingness to match more than £800m in public funding that could be siphoned from the BBC’s television licence pot. The government indicated it would shop around for partners, however. BT also trumpeted success in bringing widespread “next generation” access to Northern Ireland as part of a public private partnership, and progress with a similar scheme in Cornwall. The first exchanges to be upgraded as part of the Cornwall project were announced, and Avanti Communications was named as a provider of satellite broadband services for areas that cannot be served with fixed line infrastructure. The Welsh Assembly is also in talks with BT and other service providers, with a view to supporting fibre based projects for the principality. [pp.20,21,37,52,53.]
- BT Global Services took another step in its strategy of building a business around vertical markets, with new units and management appointments. Based on its proven model for the financial services market, the division is also targeting consumer packaged goods, global commerce, and global government and health. Kim McCann is joining BT to lead the consumer packaged goods business. A customer innovation centre was opened by BT in China, as another element of the Global Services’ recovery plan — growth in Asia Pacific through provision of services for Western companies expanding into the region, and local companies building businesses reaching beyond domestic markets. [pp.38-40,44.]
- BT Retail announced more new services for its BT Vision pay television offering, with the introduction of 3D movies and integration of the BBC’s iPlayer (utilising an application developed by Pushbutton). There is speculation that YouView services could be bundled with broadband when the platform launches next year. The continued developments in BT’s TV offering are intended to play to network strengths that could be a differentiator for the telco. However, after the disappointing level of impact for the Sky Sports launch, BT still has some way to go to prove its pay TV credentials. [pp.12,27-29.]
- BT Wholesale announced it is offering its ISP customers a new fibre-based product with a lower guaranteed connection speed of 5Mbps. While there was some media huffing about delivery of a fibre offering that promises speeds below basic copper, the product could have an impact in rural areas where distances from exchanges make delivery of even basic broadband a challenge, and so help spread the fibre footprint more rapidly. Meanwhile, Openreach is conducting technical trials of 1Gbps connections in Suffolk. [pp.50-51.]
- BT Group’s financial results for the first half of the 2010-11 financial year showed continuing signs of emerging recovery, but management’s reluctance to express anything more than cautious optimism appears justified, as closer examination finds cost cutting still core to the improvements. While BT Global Services is recovering, it is doing so from a real low, and it is difficult to find bright spots at BT Retail beyond maintenance of broadband market share. More positively, BT Wholesale insists there are further bottom line benefits to come from its managed services drive, despite apparent slowing of growth, and Openreach now is proving itself as capable of finding efficiencies as other divisions. [pp.4-16.]
- BT Group is to sell a 5.5% stake in Tech Mahindra to partner Mahindra & Mahindra, reducing its holding in the Indian business process outsourcing unit to less than 25%. The share BT has sold is valued at around £60m. Despite the cut in its holding, BT insisted Tech Mahindra would remain a key strategic supplier. This partnership could spread to another continent, as Tech Mahindra is looking at expanding its presence in Latin America, a region where BT is also growing its business. [pp.17,48.]
- BT Group and TalkTalk won a court case that will spark a judicial review of the Digital Economy Act 2010 , the controversial government legislation passed prior to the recent UK General Election that placed additional burdens on large ISPs to monitor alleged copyright infringement. [p.19.]
- BT recalibrated the inflation indexing used for its pension fund from the Retail to the Consumer Price Index, which led to the scheme’s deficit dropping sharply. The Group is said to be considering a legal appeal, following a decision by Ofcom that it cannot recover the costs of the pension deficit via its wholesale pricing structure. BT appears to be taking an increasingly belligerent attitude towards the regulator, with an appeal to the Competition Appeal Tribunal on Ethernet pricing joining a PPC appeal. BT is not being entirely antagonistic, however, with Openreach proposing new LLU pricing controls ahead of a delayed Ofcom review, which have been accepted for adoption. [pp.8,21,22,23.]
- BT Group was named the third highest spender in the UK on R&D in 2009, with its outlay of more than £1bn more than three times’ the level of closest telecoms peer Vodafone. Whether the strikingly high spend is sustainable at a time of ‘efficiency’ savings within the Group, and when tangible benefits are questionable, remains to be seen. [p.24.]
- BT Retail’s patchwork network of Wi-Fi hotspots exceeded the two million site milestone, adding the second million in around ten months. The network largely comprises BT Fon sites, where retail customers share access to their broadband connection. Fon, in which BT holds a small stake, announced it has sold two million of its latest Wi Fi router to telco customers worldwide. [p.31.]
- Insurance company Hiscox was named as the first customer for the BT Openzone location-based advertising service developed by JiWire. [p.31.]
- BT Conferencing and AT&T announced a commercial launch of inter-provider connectivity for Telepresence from Cisco offering seamless connectivity. A video broadcasting solution called CEO Connect was also unveiled with Kontiki, and “cloud” conferencing promised for the New Year in Italy. New audio conferencing applications were announced by BT for the MeetMe service, developed in partnership with Ring2. [pp.33-34.]
- BT Engage IT is to offer “pay as you go” desktop security solutions from Symantec to SME customers. Services will be Symantec-branded, but billing and support will be provided by BT. [p.36.]
- BT Global Services continued rollout of its Virtual Data Centre offering, with launches in the Benelux region and in Ireland. A new “green” data centre site in Holland is to support anticipated demand and will become a key hub for BT in continental Europe. New Next Generation Contact Centre pricing models are also being introduced in Ireland as BT targets on demand services. [pp.37,46.]
- BT Global Services won back a contract to provide voice and data services to Lloyds Banking Group. The telco had lost the contract to an IBM Vtesse consortium in 2004. [p.40.]
- BT subsidiary Vicom highlighted two contract wins with Caixa Econômica Federal in Brazil, to provide connectivity between data centres, banking sites, and lottery outlets. A contract win in Italy will see BT provide international data networks for Italian embassies. [pp.40-42.]
- BT said it will bring 450 jobs to the Sandwell area through the opening of a new contact centre. Reports suggested BT received the lion’s share of money spent on NHS IT projects in the six months to September 2010. [p.43.]
About BTwatch
Report: #218
Covering: November-December 2010
Published: December 2010
Next report: January 2011
For comprehensive coverage of BT Group worldwide, nothing comes close to BTwatch. Independent and unbiased, BTwatch offers unparalleled scope, valuable analysis and a considered view of BT’s corporate, domestic and international activities.
- BTwatch provides a thorough yet accessible grounding in the state of BT now, and where it is going. Following BTwatch enables our clients to get up to speed quickly, and stay ahead of their game.
- BTwatch provides comprehensive analysis and insight into everything relating to BT, including its Divisions -- BT Retail, BT Wholesale, BT Global Services, and BT Openreach -- and its European and wider international operations. Also covered in-depth are strategy, financials, and associates and investments (such as Tech Mahindra).
- Our ‘watch' report services are repeatedly described by clients and end-users as the single most valuable source of third-party sales intelligence, and are considered invaluable by many high-achieving commercial teams and account directors.
- A unique source of valuable opportunities, knowledge, planning, strategy, and much more, the reports represent both tactical tool and strategic reference, providing input and even a springboard for corporate planning, reporting, and meetings.
- A ‘must-have' for sales teams focused on high-value sales, maintaining strategic relationships, and managing extended sales cycles. Just one nugget, insight, or validation can pay for the service many times over.
- Pricing is typically USD $8.2k / EUR 5.7k / UKP £5k per year for an Account Team Licence, and can be tailored to meet your specific needs and situation. Copies of individual reports are also available, priced from GBP £999 (USD $1,650 / EUR 1,100). Multiple purchasing options available, including payment cards.
- Delivered electronically 10-12-plus times a year, with back issues also available, providing unparallelled reference and insight into major events, strategic initiatives, financials and KPIs.
- Contact us for further information, including samples and evaluation trial requests. info@marketmettle.com / +44-20-7183-0111.
Comments
Got something to say?
