Pragati Verma, December 08, 2008
The Financial Express
Even as UK’s largest phone company, BT Group, slims down to improve profitability, it seems to be upbeat on growth prospects in India. Matt Bross, CEO BT Innovate and BT Group chief technology officer asserts that three out of four business units—BT Retail, BT Wholesale and Openreach are delivering on or ahead of target and Global Services division could see a correction soon. He is even more gung-ho on the Asia Pacific region and expects it to touch $2 billion by 2011.
Responsible for driving and optimising BT’s innovation ecosystem, he is clearly sold on the idea of open innovation—a collaborative business model that enables BT to connect with business, industry and academia. Matt is the leading force behind BT’s multi-billion pound, 21st Century Network transformation. In an interview, he explains Bt’s open innovation model and what to expect at Global Services.
Excerpts:
British Telecom has just talked of trimming workforce. Your much-talked about Global Services division, is struggling. How do you plan to pull out of the slump?
Three out of our four business units, BT Retail, BT Wholesale and Openreach are delivering on or ahead of target. With Hanif Lalani at the helm, we will start seeing a correction in the Global Services division too. He has done it for the wholesale business. Now, there is a strong focus on profitability. Our revenue and order base grew last quarter. Our chief executive officer has also expressed confidence that we will improve profitability.
Are you seeing any signs of slowdown in Asia, especially India?
Asia Pacific is clearly one of the strong growth areas. If you look at our multi-site multinational customer base, they see growth coming from the region and so our business will naturally grow here, in terms of servicing their IT and network services needs. We expect the revenues from Asia-Pacific region to reach $2 billion by 2011.
In India, we have grown by 39% in terms of revenue over 2007. We have seen good success with multinational companies expanding in India and Indian companies eyeing global footprint. We are also experiencing growth in other markets such as China, Singapore and Australia, and verticals such as transportation, logistics and energy.
BT talks a lot about its open innovation model. What kind of results have you seen?
The open innovation approach ensures that market opportunities are capitalised. Rather than years or months, the window of opportunity for a new product innovation to carve out an appreciable market niche may be as short as weeks or even days. Market demands drive BT’s business model. We understand that there should be no gap between what customers want and what BT can deliver.
Companies in a wide range of industries from pharmaceutical to aerospace—and BT itself—have been ‘scouting’ for bright ideas for many years through linkages with universities, partners, external R&D laboratories and technology start-ups.
For instance, a major European transport company asked for proof of diverse routing. To back up our guarantee, BT deployed a programme of routing validation to help ensure service and business continuity. One of the technologies developed for this process, to identify existing ducts and their contents, was an optical fibre vibration sensor. Invented by BT, it works like a microphone to locate vibrations over great distances and can indicate their exact source.
How is your Global 21st Century Network (21CN) platform rolling out?
BT’s global 21CN is expanding quickly, adding a new city around the world every week. We believe our next-generation network will be the broadest, richest and most resilient in the world, enabling companies and organisations to instantly trade across the globe with high speed and great resilience. It is a global IP-based voice platform, which will see the current legacy TDM network replaced by an MPLS-based network.
In UK, the core is 100% complete. The global network is 100% complete and available in 172 countries. BT’s SDK is in use among thousands of independent application developers worldwide and we’ve acquired Ribbit to strengthen this offering. We delivered substantial cost savings to date (£600 million gross) against our £1 billion target with further to be achieved over the next few years. 21CN is here and delivering new, next generation capabilities for customers in the UK and around the world today.
You have met CEOs and CTOs (chief technology officers) in India as well as UK. Are their concerns similar?
It’s difficult to find a secular trend. It varies a lot from company to company. I have met CTOs and CIOs back home and CEOs here. And I find CEOs are worried about delivering growth as economy shrinks; reducing operating costs and maintaining relevance in micro terms in daily life of customers.
CTOs and CIOs, on the other hand, are concerned about how to manage cyber security and ensure security as number of users and access points grow. They are equally focused on reducing cycle time.
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