It’s around 32 months since Ben Verwaayen, chief executive, BT Group joined the company and things are
looking pretty good. The company is aggressively focusing on next generation services, and it’s paying off. The strong growth in new-wave services is offsetting the decline of traditional business. On his first visit to India, Ben Verwaayen spoke exclusively to the VOICE&DATA team about diverse topics like next-generation services, customer-satisfaction model, project Bluephone, and BT’s India plans. Excerpts:
There is a lot of transformation happening with the coming of convergence and IP. In this context, what is your first and prime focus?
My prime focus is the transformation of the company. The industry is undergoing massive transformation, but not everybody is aware of that. What is happening is basically three things-major shift from narrowband to broadband, shift from selling capacity to selling capabilities, and from an organizational point of view companies have changed from product focus to customer focus. A 21st century telcom company is one that understands customers and changes its focus towards customer satisfaction and organizes processes around customers.
Recently, BT was ranked as the world’s top telecommunications company in the Dow Jones Sustainability Index award for the fourth year running. But BT has been going through problems-huge debts, low employee morale, low profitability, and drop in market share. So where is the gap?
I think we have just demonstrated that perception is reality versus time lag. So, what you have described to me is reality on the one hand of Dow Jones, which is a recent reality, and a big debt which was there two and a half years ago. We are now a focused company and are presently in transformation, because we embrace new technologies in a balanced way.
You were instrumental in splitting Lucent and forming Avaya. Presently, even OFCOM is talking about structural separation of BT. What’re your thoughts on it?
Logic of the technology side is a different logic from services. In bringing services to our customers, we probably integrate around 250 service level agreements-that’s what we have to deal with in structural separation. Structural separation has been tested and it simply doesn’t work. It is no longer on the agenda of OFCOM either. It was in the strategic reviews initially and it was rightly put there.
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The real subject is not about structural separation but whether there is a market that is transparent. And whether there are bottlenecks that can’t be replicated by somebody else. So, from economic as well as a technology point of view, is there a fair market position? With Avaya it was an economic reason to take certain parts of technology, and reality proves that it was a wise decision. BT’s takes regulation seriously as regulation is here to stay, but it has to be fair. Regulation should focus on what’s next and where it stands.
You have worked for Lucent and KPN in the past. What have you learnt?
What I have learnt is to be humble and realistic. There is only so much that a leader can do. As for the rest, he has to be lucky. He has to have great people around him. It is not the boss who makes the company. He only makes the agenda, sets the tone, and chooses the right people.
Next generation services-ICT, broadband, mobility, and managed services contribute around 18 percent of your revenue. How do you see them shaping up in the future?
The traditional business is showing a negative growth of around five percent whereas next-generation services are growing by around 30 percent. The formula for BT, for next-generation services, is very simple. To know how good the company is doing, you have to look at broadband or at corporate services. We are defending our traditional business and stopping the decline. I got saving because we need to get our economics around the idea that it’s new stuff in the initial phase. It has to provide a lot of margin for a long time and, in order to make it, one has to take it to all sides of the business. We are taking advantage of new service opportunities and are aggressively looking at systems improvement for rationalization our organization and building a new transparent all-IP network, saving us a billion pounds on an annual basis.
What’s your advice to service providers in terms of new models for customer satisfaction?
There is an opportunity in front of us to change the model and to give more power to our customers. Today, if a customer wants something from a telco, it means going into the network. This is a cumbersome and time-consuming process that frustrates consumers and frustrate us.
The new opportunities is about having a digital network. It allows the customers to choose whatever they want and change their plans whenever they feel like. We can give products to the customers, give business customer full insight of how the network is working to give them end-to-end transparency that we couldn’t in the past. And this is at a fairly basic level. You can provide the best in class, by combining the best engineers in Bangalore, the best possible designer in California, and best possible manufacturing in Beijing. And the world can reunite because the network economy is based on the network we
provide. That’s what we see happening with our customers and also with the industry.
What are your chances of launching Bluephone products in 2005? And how are you positioning the phone?
About 15 service providers are associated with it, like NTT, Vodafone, Swiss Telecom, and
others and it is moving well. We had the intellectual design and now all of a sudden more people have come on board, as it was attractive. And of course, people do not want to have five different numbers and six different mailboxes. So far, it’s going well in the designing phase. We need volumes and it will be a big market. It is likely to be launched next year.
What is the main driver for service providers in the next five years?
Customer focus, customer focus, customer focus and all the rest follows.
