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BT Openreach separation agreed but still part of BT Group March 10, 2017

Posted by Dominic Black in Uncategorized.
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This morning it was announced that BT and Ofcom have reached agreement on a long-term regulatory settlement that will see Openreach become a distinct, legally separate company with its own Board. However, the new entity will still report to the BT Group and ultimately the BT CEO Gavin Patterson.

The new company, Openreach Ltd, will have its own separate logo without BT and report to an independent board. It will also transfer over 32,000 employees to the new company however their pension rights etc. will be upheld.

The BT Announcement stated:

“This Board will set Openreach’s medium term and annual operating plans and determine which technologies are deployed, within a strategic and financial framework defined by BT. Openreach will be free to explore alternative co-investment models in private with third parties.

The Openreach CEO will report into the Openreach Chairman, with accountability to the BT Group Chief Executive with regards to certain legal and fiduciary duties that are consistent with BT’s responsibilities as a listed company.”

The question will be exactly what does this mean in terms of independence, and what benefits it will bring. TalkTalk responded favourably in a statement this morning but did reinforce that Ofcom’s job is not over yet.

Dido Harding, Chief Executive Officer, TalkTalk commented:

“We welcome the agreement to create a legally separate Openreach. The new company will be better placed to deliver the improved investment and service that consumers and businesses deserve. This deal will require robust Ofcom monitoring and enforcement to ensure it delivers the improvements the regulator expects. We hope this is the start of a new deal for Britain’s broadband customers, who will be keen to see a clear timetable from Openreach setting out when their services will improve.” 

In essence, this seem a very positive move and we hope it brings what BT Gavin Patterson stated:

“I believe this agreement will serve the long-term interests of millions of UK households, businesses and service providers that rely on our infrastructure. It will also end a period of uncertainty for our people and support further investment in the UK’s digital infrastructure. 

 

 

 

 

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BT Clive Selley discussed BT Inside Out wireless & future voice strategy at Genband Perspectives June 11, 2014

Posted by Dominic Black in Uncategorized.
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It’s strange that you might travel across the Atlantic and one of your highlights of a conference is to hear from Clive Selley explaining BT’s UK technology strategy. Clive was a keynote speaker at Genband Perspectives conference in Orlando.

Clive explained that BT believe the total market value for the key areas they focus are

Wireline

Mobile Telecoms

Pay TV

IT Services

Clive explained BT’s television and fiber strategy but I was particularly interested in his discussions about BT’s mobile and Future Voice strategy. He described that the momentum from TDM to IP was now moving at a pace and is the most advanced in the Enterprise segment, and how voice only networks were now morphing to session based core networks. What was also interesting is that BT valued the IT services at £37 billion in the UK alone.

He described how BT services were now all based on a IP SDIN (Session Distribution Interworking Network), which is based on Genband and he mentioned that the growth on this network was now running at over 100% percent a year and this had been the case for the last 2 years. This core is also being expanded globally into USA, Middle East, Asia and Europe. The growth of this is also demonstrated by the wholesale offering of IPX being one of the 3 fasted growth areas in the whole BT Group. So as there are discussions about who offers the applications within the BT network, whether that is Cisco HCS, Genband or Broadsoft etc., it appears Genband is well established in the very core infrastructure being used in the SDIN. With the current growth rates, that must be a good place to be.

Clive then went onto describe how BT have been considering a reentry into the mobile market.  He mentioned effectively they had 3 strategic choices

–       Buy a mobile operator

–       Build a national mobile network

–       Or try a Disruptive play

He mentioned the cost of purchasing one of the UK based mobile operators would probably be too expensive and to build a national network would be both costly and take a long time to deliver. He also mentioned that he thinks the current providers are going to struggle because as new LTE technology is enabled the growth on their core is network and cell infrastructure is going to increase cost dramatically. 

So when looking at a disruptive strategy BT looked at a number of key factors, probably the most important was that 70% of mobile data was happening either at a users home or in a single workspace, and often mobile delivery in building or at home was often poor.  With BTs role out of FON and other investments BT had already got over 5 million WIFI hot spots.

So BTs strategy will be to use low cost FEMO Cells using LTE spectrum in home and office to provide in building service in those locations, and then using its EE MVNO to provide service outside of the building.  BT will then be able to benefit from their core investment and infinity investment to provide a disruptive mobile play.  This was described as BTs “Inside Out” wireless strategy.

Its interesting that BT continues to leverage the edge provided by its customers to power its services, and it will be interesting to see how this will manifest self in real services in years to come but certainly should be disruptive to the mobile operators including its old friend O2!