BT, like its rival network operators, is trying to offer
its business users more than just internet access and a telephone
service.
For Pierre Danon, chief executive officer at BT Retail, the
division of BT that provides network and telecom services to
businesses and residential customers, this will involve a focus on
broadband, outsourcing and wireless services.
The company has begun to reinvent itself. In October BT offered
mobile services for the first time since the 2001 demerger with BT
Cellnet, now O2.
Last week BT signed a deal with Siebel where it will offer Siebel's
CRM Ondemand hosted service to UK businesses for £50 per user per
month.
The Siebel agreement is the first step for the phone giant to offer
hosted applications to users over a broadband connection. By April
2004, Danon expects to offer further applications.
BT has begun differentiating its various networking services for
businesses.
Small business users are enthusiastic about ADSL, which can offer
broadband access at relatively low cost, but BT also offers
costlier leased lines to achieve similar results - always-on
high-speed internet access.
Danon believes businesses that need to run intensive applications
and need guaranteed quality of service will still see the value in
leased-line deployments. He has reduced the cost of moving from
ADSL to make leased line more attractive, but there is still a
price premium of 40% for users making the move. "Before the
reduction it was 200%," Danon said, which he admitted was
"ridiculous".
In February 2004 Danon intends to roll out an SDSL service which
will allow users to upload data at 1.5mbps. Current ADSL users can
download data at 512kbps, but the upload speed is limited to
128kbps.
"SDSL will provide even more competition to leased lines," admitted
Danon, who said one benefit of SDSL over ADSL was that it could
support several data channels, rather than the single channel
available on ADSL. "Voice over IP on ADSL is not possible because
there is only a single line." But with SDSL there are four
channels, allowing small and medium-sized enterprises to start
using voice over IP.
One of the big questions for users is whether there will be a
"killer" application for mobile technology. Danon is optimistic
that one will emerge, but he does not know from where.
Nevertheless, BT is heavily backing Wi-Fi.
Danon said BT had already rolled out almost 2,000 hotspots through
the company's Openzone service. By summer 2004 "there will be 4,000
places in the UK where users will be able to run video telephony
sessions from a laptop PC, where the costs will be four to five
times cheaper than 3G", he said.
Given the expected growth in wireless hotspots and the adoption of
GPRS, Danon conceded that users might not need 3G services. They
would simply connect to the nearest wireless hotspot in order to
access mobile data services, and when they move out of a hotspot
zone to an area not covered by Wi-Fi, they would switch to GPRS.
"Today I have a trial for Wi-Fi hotspots in Portsmouth which can
cover an area of 7km each," he said. Intel, he added, has just
announced Wi-max, a technology that, in 2005, will enable the
hotspots to extend to 50km.
"There is a lot of mileage for Wi-Fi technology and its
derivatives," said Danon. He did not think Wi-Fi would make 3G
redundant and added that BT had invested in both types of
technology, unlike some of BT's rivals. "I have not spent £5bn on
buying a 3G licence, I have spent £10m to provide 3G," he
said.
BT supplies outsourcing services and, at the same time, outsources
tasks it does not believe are core to its business. The company has
outsourced its own desktop IT to Computacenter in a move that Danon
believes can benefit staff. "I received irate e-mails and the
unions demonstrated outside our building," said Danon. Six months
on, he has had no further complaints.
According to Danon, BT's own outsourcing operations offer greater
opportunities for telco engineers than end-user companies. His main
concern is offshore outsourcing. It "forces people in the UK to
move up the value chain and become more competent, adaptable,
valuable and serviceable," Danon said.
This could be good for UK business in the long term, said Danon, as
the challenge of offshore outsourcing would force everyone in a
business to provide a better service.