BTwatch Report #220 March-April 2011 Executive Brief
18 April 2011
|
- BT Group was apparently surprised by vendor and partner Fujitsu’s move to bid for public funds, with the aim of building a 1Gbps FTTP broadband network covering five million rural homes, representing the “final third” (or quarter) of UK households. Virgin Media, TalkTalk and Cisco are supporting the initiative, which could have a serious impact on the BT’s Wholesale and Openreach divisions, with longer-term consequences for BT Retail. Fujitsu’s play, to create a new UK network utility business, does come with caveats, however. Plans are said to be dependent on winning a dominant share of government next generation access subsidies, and on reaching agreement with Openreach on terms that make pole- and duct access sharing viable. Regardless of whether the initiative proves to be a substantive challenge to BT’s network monopoly in rural UK, the incumbent has received a wake-up call, with even greater urgency added to strategy being evolved by Openreach’s new Chief Executive. [pp.5 6.]
- Olivia Garfield was named as the new Chief Executive of Openreach, replacing Steve Robertson. While the achievements of Robertson in creating a successful and distinct access services division, which has enabled BT Group to free itself of many regulatory shackles, should not be underestimated, the new appointment of the up and coming protégé of Group Chief Ian Livingston signals potentially interesting times for the business. Openreach has struggled of late to juggle tough financial targets, demanding external customers, and BT’s drive for fibre. Garfield, who had a next generation strategy focus before taking on the Openreach role, is likely to have fibre as a top priority, and proposals such as outsourcing some of Openreach’s traditional obligations, and an increased focus on cost cutting, could be a consequence of this. [pp.8 9.]
- As BT Retail sees continued success for its broadband products, the division set out plans to put broadband at the centre of promotions across its entire portfolio. However, the way the division promotes its internet services may need to change, as regulator Ofcom published another report showing actual connection speeds are still substantially lower than advertised maximums, with BT performing poorly in many areas. Market leading upload speeds of BT’s fibre products were one highlight. BT’s consumer B brand Plusnet also launched fibre offerings with cut rate monthly charges. [pp.17,19,20 21.]
- BT Wholesale announced plans to expand its “21CN” ADSL2+ network to 80% of the UK population by the end of 2011. However, the Wholesale business saw questions asked about the resilience and redundancy built into its next generation network after a core router failed, and ISP customers suggested that, despite significant investment, BT’s infrastructure contains significant single points of failure. [pp.46,47.]
- BT Group is rumoured to be in talks with leading vendors Alcatel Lucent, Ericsson, and Siemens regarding a further disposal of shares in Tech Mahindra, in which it holds a 24% stake. The speculation comes as Tech Mahindra became involved in an alliance with Cisco, and its future merger partner Mahindra Satyam reported promising results despite ongoing tax controversies. [p.4.]
- BT Group continued talks with the government and media content owners, regarding the challenges of addressing internet piracy, while its legal challenge to the Digital Economy Act reaches the courts. In a move that could be seen as placating the major music labels that are among the most affected by file sharing, BT Retail is thought to be considering the launch of its own music download service, although details remain unclear. [pp.10,22.]
- BT continued to trumpet its public private partnerships on next generation broadband rollout, in Cornwall and Northern Ireland, and called on other authorities representing rural communities to become more proactive in generating fibre projects as additional government funding is announced. Openreach detailed exchanges set to be upgraded to fibre over the next year. [pp.6 8, 30.]
- Altnet Vtesse saw its latest appeal to the European courts, to have the UK’s infrastructure rates charging system declared unfairly favourable towards BT, fail. [p.11.]
- Ofcom is looking to change the regulatory accounting requirements for BT, relaxing requirements in less significant product areas, but requiring more detail in fields where the telco retains market power in broadband delivery. [pp.12 13.]
- BT suppliers are to be expected to commit to new carbon reducing goals, as part of the company’s social responsibility commitments. [pp.15 16.]
- Landline charges from BT Retail are increasing again, which will mainly affect customers not using the telco’s bundled packages, which feature inclusive calls and minutes. BT’s attempts to switch its consumer base onto automatically renewing rolling contracts may be halted by the regulator, following a consultation, although the telco appears already to have scaled down its use of the tactic in the wake of negative publicity and, according to Ofcom figures, an apparent lack of public interest. [pp.24,25.]
- Lord Sugar was announced as the new Chairman of YouView, the IPTV platform backed by BT. Sugar, who has experience in the field of digital set top boxes, is replacing Kip Meek, who was in the post for just a matter of months. [p.26.]
- BT Retail’s Expedite and Fresca units announced work with companies including Crabtree & Evelyn, Pets at Home, and Scott & Lyle, for services encompassing new e commerce opportunities, and deployment of the Virtual Data Centre solution provided by BT Global Services. [pp.27 28.]
- BT Ireland signed a deal to provide network services for the Police Service of Northern Ireland, possibly winning back contracts lost amid the telco’s recent crisis, and also signed a £30m contract with the province’s Housing Executive. [pp.28 30.]
- BT Global Services announced new collaboration services targeting the financial services sector, with new offerings aimed at ensuring regulatory compliance on data authenticity, mobile communications, and secured messaging. [pp.31 32,34.]
- BT launched its Global Inbound Services for hosted voice, in Latin America, its Next Generation Contact Centre suite, in Singapore, and unveiled updates to its increasingly high profile Virtual Data Centre portfolio at the CeBIT event, in Germany. A cloud based Managed Virtual Firewall Service was also announced. [pp.35,36,42,43.]
- Contract wins were announced by BT Global Services, including with Midea in China, supporting the manufacturer’s push outside its home market — supporting the international expansion needs of local corporations is a key element of BT’s Asia Pacific growth plans. In Europe, the telco won: a network deal with Visionlab, in Portugal and Spain; data centre contracts with two health services, in the Netherlands; and a network contract with Italian rail operator NTV. BT is attempting to strengthen its position in a tender for public sector work, in Holland. [pp.36,38 40.]
- Chess Telecom awarded BT Wholesale a “multi million” pound deal to provide wholesale minutes in a fully managed package. There were suggestions the contract could expand to cover next generation services. [p.45.]
- TalkTalk is partnering with rival BSkyB on fibre to the premises trials in London, using Openreach services. The former Carphone Warehouse division is making progress on development of fibre offerings for its customer base. [p.50.]
- Ofcom proposed new price cuts for Wholesale Line Rental products and LLU services. While naturally cautious on welcoming any regulatory pricing decision, BT indicated the levels of reduction Ofcom is proposing are “encouraging”. [p.51.]
About BTwatch
Report: #220 Covering: March-April 2011 Published: April 2011 Next report: May 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?
