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Content Tagged with british + telecom
BT to Cut Carbon Emissions by 80%
UK telco British Telecom has been working hard to reduce its carbon footprint: Last year the company said it would invest close to half a billion dollars in wind farms, and in February BT installed a solar system for its U.S. headquarters. This morning the company says it plans to reduce its carbon emissions 80 percent by 2020. Ah BT, you put our U.S. telcos to shame. Earth2Tech has the full story.
Global Telcos Plotting a Skype Rival?
AT&T, in conjunction with some 10-15 incumbent telecom carriers — British Telecom, Deutsche Telecom and NTT among them — is plotting to launch a Skype competitor, according to a research report issued this morning by ThinkEquity analyst Anton Wahlman.
This is Wahlman’s theory for now, but his track record is full of theories that have eventually been proven right. For instance, he once issued a report that outlined 16 reasons why Cisco should buy Scientific Atlanta — which the networking giant went on to do, for $6.9 billion. For that reason alone, I put in a call to AT&T to get the lowdown, but all they would offer was the boilerplate phrase, “We can’t comment on this type of speculation.”
Anyway, back to the Skype competitor! Essentially what Wahlman is saying is that incumbents are going to offer a VoIP client that will work on the incumbent broadband/3G wireless pipe, and will use a backend platform that will allow folks to make free voice calls to anyone who’s logged into it.
Much the same way as Skype-to-Skype calls are free, incumbents could use their platform to keep calls from each other’s network free. The plan could help them avoid the termination charges and still make money when the calls go off the network to, say, a rival’s phone service or wireless network. “We believe that they will have to use a common client and common software platform in order to make this work,” Wahlman said.
Isn’t it too little, too late? Realistically speaking, there’s a slim chance of anyone catching up with Skype, which keeps adding subscribers and which, despite being mismanaged by its acquirer, has a momentum all its own. “Better late than never,” was Wahlman’s take.
Here are some key points about this yet-unnamed proposed Skype killer:
* To be launched in 2009.
* The concept will be extended to mobile phones eventually.
* The service would run on the carrier broadband connection, and also on top of the 3G/4G wireless broadband pipe.
* The service will be used as a lure for selling other services such as video.
* The incumbent consortium partners can brand this service any way they want.
Big shifts in the telecom landscape are forcing the carriers to think along these lines, Wahlman said in a chat earlier this morning. First, carriers are reluctantly facing up to the fact that voice has become a losing proposition. Thanks to competition from folks like Skype, voice is becoming essentially free. Second, they are losing fixed-line customers with an alarming rapidity.
As I have noted previously on several occasions, the carriers are in a race against time — these line losses basically make their plans to sell other services such as broadband and video impossible, thereby risking their future plans all together. The cost of winning back the customer who switches to, say, cable, VoIP, or a rival’s wireless service is just too high.
In the past, carriers have merely taken half-measures to address the voice-for-free problem. So this is radical new thinking: If voice is a losing business, why shouldn’t the carriers cannibalize it themselves, then sell other services, including video? As Wahlman noted, “Robust data connection is the most valuable service the carriers sell.”
Amen to that. I just find it hard to believe that the dinosaurs are finally getting jiggy with this new way of thinking.
Broken Promises Behind BT CEO Exit
In 2006 I had traveled to London to meet British Telecom (BT) CEO Ben Verwaayen and his team, hoping to get a first hand look at how Verwaayen and his team were trying to overhaul the company well known for its iconic phone booths.
They had put in place a strategy to diversify into IP services, build a brand-new 21st CN (UK broadband network) and, to cap it all, plans to become the carrier of choice for large multinationals. It ended up as a long feature in the August 2006 issue of Business 2.0.
The 56-year-old former Lucent executive Verwaayen resigned earlier this week after six years at the head of BT. He is being replaced by 43-year-old Ian Livingston, who until recently ran BT Retail and was seen as the maverick to make BT Retail a force to reckon with.
Livingston, before joining BT, was group finance director at electrical retailer Dixons and had helped set up Internet service provider Freeserve, now part of Orange. Livingston was part of Verwaayen’s attempt to hire folks from outside of telecom industry and bring some consumer-savvyness to a stodgy company struggling to stay competitive with pesky upstarts. He will have his work cut out for him — the company is still too big, too lumbering and too bureaucratic. The 21CN is still nowhere close to delivering its promise. At the same time, BT is facing increased competition from upstart broadband providers like Carphone Warehouse and Virgin. The company has no consumer mobile service, and it continues to lose consumer lines.
Those were the very same issues that put Verwaayen on the hot seat. On his watch, BT had a mixed record. A lot of promises were made, but never fully realized. The only stand out was the Global IT services business. It now accounts for about 40 percent of BT’s total revenue. But that’s about the end of it.
Fierce Telecom points out that “Verwaayen’s decision to leave comes not long after BT reported poor financial results for the fourth quarter and full year of 2007.” In recent months, several executives have left and there are questions about “execution and expense of its 21st Century Network project,” FT goes on to say.
So what’s next? Job cuts, according to some analysts who point to Livingston’s track record. I wonder if one of those will be company CTO Matt Bross, who came to BT at the urging of Verwaayen.
What are your thoughts on BT and its future?
Additional reporting by Irina Haltsonen, who is spending the summer with the GigaOM team.
MySpace’ Roommates, BT Wind: GigaNET Headlines
- WebWorkerDaily: Turn on the TV and get to work
- NewTeeVee: MySpace gets in bed with Roommates.
- Earth2Tech: BT bets half-a-billion on wind power
- FoundRead: What are a startup’s key assets?
Telecom Incest: The Fon-BT Deal Sounds Screwy
On closer inspection, today’s deal between Fon and British Telecom sounds like it could be a costly one for Fon and its investors. GigaOm is suggesting that Fon may have agreed to pay $8 to $10 to BT for every one of its broadband customers who agrees to sign up and activate the Fon service. If that’s true, with three million broadband subs at BT, that represents a potential liability of as much as $30 million. (Update: Just got off the phone with Fon USA CEO Joanna Rees, who says she has been closely involved with the BT deal. She categorically denies that Fon is paying BT for subscribers: “I have never heard that,” she says).
Buying customers is never a good thing if you can avoid it. Fon might need to do another round of fund-raising to pay for this deal. The $35 million it’s raised so far from Google, Skype, Index Ventures, and Sequoia, among others, might not be enough, especially if it cuts more sweetheart deals with other telcos around the world.
But here’s the really screwy part: BT is also now an investor in Fon, according to founder Martin Varsavky. So at the same time that it is presumably putting money into Fon with one hand, BT is about to potentially extract millions of dollars out of Fon with the other. I say presumably because it is possible that BT did not even put any cash into Fon for its stake in the first place (terms were not disclosed). Often in these deals, as the price of admission, the telco demands not only cash from the startup but an equity stake as well. In the telecom world, some things are never free. (Update: Rees says BT did invest cash. So maybe the deal isn’t so screwy, after all.)
Crunch Network: CrunchGear drool over the sexiest new gadgets and hardware.
Fon Inks Deal With British Telecom
Spanish WiFi startup Fon is invading England. In its quest to turn everyone’s home and business WiFi router into a worldwide network of shareable hotspots, Fon just inked a long-rumored deal with British Telecom. BT’s three million broadband customers in the UK can now opt to join the Fon network, which gives them access to 190,000 WiFi hotspots around the world. BT joins Time Warner Cable in the U.S., and French broadband provider Neuf in endorsing Fon’s WiFi-sharing across their customers.
Most ISP service agreements still ban customers from reselling or sharing their broadband connection. But Fon is convincing some ISPs that it might actually be a selling point to be able to tell customers that included in their home broadband bill is access to free WiFi when they travel across town or across the world. Fon claims its network of WiFi hotspots is already the largest in the world. Investors in Fon include Google, Sequoia Capital, and Index Ventures, and now BT as well.
Crunch Network: CrunchBoard because it’s time for you to find a new Job2.0
Competition, ain’t that a good thing
Competition in broadband - and I mean real competition not what passes for competition in the US - is such a beautiful thing. It works so well for the consumers. UK broadband is a perfect example.
A few months ago, NTL and Virgin merged to become Virgin Media, the largest broadband provider in the British Isles. They didn’t do such a good job of keeping their customers happy, and British Telecom surged ahead, leading to speculation that some private equity guys are going to buy out Virgin Media.
And while these two are jostling for the top spot, the little players are trying to do their best to lure customers, and offering all sorts of interesting combinations. Pipex, has started offering six months of 8 Mbps broadband (though with 2GB transfer cap) for free, as long as folks sign up for $25-a-month voice plan (unlimited local and national calls). Of course there is Carphone Warehouse with its Free Talk Talk offering.
(I wonder if any of our readers are tracking the broadband prices in UK and if they are really heading south.)
Telco dogs need to learn software tricks
Last year, after visiting British Telecom (BT) and meeting with their executives, I left London with one key take away: BT was one telco that completely understood that it was facing uncertain times, and had no choice but to reinvent itself to survive.
The senior BT management understood that while broadband was a start point for its reinvention, it had to boldly go where no telecom had gone before, if they wanted to survive. They had to behave and think like an Internet-based software company.
Ben Verwaayen, BT chief executive, when talking about BT’s transformation remarked :
“This is the second phase of BT’s transformation. The first phase saw BT shift its focus from narrowband to broadband. This next stage will see BT advance from a 20th century hardware-based company to a 21st century software-based services company.”
Though it may sound like a hookey statement by a telco chief, it is actually quite true. According to McKinsey nearly 60% of CIOs are currently considering software-as-a-service model. If you factor in the lag-factor typical of McKinsey reports (aka a year after the fact), the SAAS movement is well under way.
“There are more than 1,000 SaaS vendors in existence today, although 90% have less than $15 million in annual revenue, but are growing 4x faster than licensed software,” notes Colby Synesael, analyst with Merriman Curhan Ford.
The weak link, however, for SaaS, is the reliability of these services over an IP connection. Synesael, makes a good point when he argues that SaaS needs to overcome bandwidth constraints, packet loss, jitter and latency. These are issues that telcos can address with their network capabilities, and they can start to learn the ways of the software world, and work with SaaS vendors.
“In a software driven world, services will be available in real time and around the globe, harnessing the potential of BT’s 21st Century Network,” Verwaayen recently said.
That holds true for any telecom operator. The old AT&T CTO Hossein Eslambolchi used to talk about software-expertise-as-a-way out from telecom commoditization.
I wonder if this is a wiser, albeit less sexy way for telecoms to bolster their business. Instead of spending $6 billion on IPTV projects, AT&T could say buy a Salesforce.com (have some money left over for satellite-based triple play) and ensure a few hundred thousand folks paying $60-odd dollars a month for the CRM as a service. It be a nice way to fight off the cable companies who are now gearing up to go after the small and medium sized businesses.