Brewer and restaurant operator Marston’s PLC is better known for its beer than its broadband. Yet the scale of its communications infrastructure, which encompasses over 2000 pubs, prompted to the organisation to set up its own private telecoms company, saving nearly £600,000 in the process.
Marston’s needed to cost efficiently improve communications between its individual pubs and head office, as well as offer services such as public Wi-Fi and internet-connected gaming.
“When the recession started to show itself, the business needed to find a way of saving money. I had been talking to some telecoms wholesalers like BT about how I could white-label a telephony service and broadband services under the Marston’s banner. They said ‘you are of a scale, why don’t you just do it yourself?’” said Mike McMinn, director of IT for Marston’s.
That meant registering with UK regulator Ofcom and becoming a private telecoms company. Then Marston’s registered with BT Openreach and now also has wholesale deals with Opal Telecom, Gamma Telecom and Virgin.
Bulking up on telecoms infrastructure
“We set about converting our managed estate and our own telephone network infrastructure, and now Marston’s Telecoms Ltd is looking after about 5000 telephone lines, approximately 1200 broadband connections and a similar number of routers. We provisioned all of it ourselves, and we have installed and built the routers and wireless access points ourselves. The implementation took 18 months, with the first six months around negotiation and just getting off the ground,” said McMinn.
Marston’s uses Cisco routers in the back office and handles critical functions such as head office communications [LR1] and electronic point of sale with DrayTek Wi-Fi routers in the front of house for public Wi-Fi. All the hardware is managed and supported from a central location.
McMinn reckons the IT team has spent £300,000 on the project. “We have had to employ two more people at a help desk level. The biggest investment has been in the routers where we did a complete technology refresh. We have spent about £150,000 on routers and access points. We also had to pay BT a deposit of £70,000 to be able to operate with them in the early days.”
Increased savings and service
But the brewery has reaped the benefits of the transition already. “So far we are turning over about £1.2 million and we have saved the company about £600,000 in straight costs, and that is with an estate that over the last 12 months has grown by about 25% from 475 to 620 public houses,” McMinn said.
Beyond lower rates, Marston’s aims to provide more focused customer service than what pubs might find with another telecoms carrier. The company uses What'sUp Gold networking monitoring from Ipswitch, which provides visibility across the network, including connections for remote home workers.
“Because we are constantly monitoring the network it is a different customer services ethic. We are usually telling the client he has lost his broadband service before he even knows about it,” McMinn said.
McMinn concedes that becoming a telecoms company was a steep learning curve: “I have to admit to being a bit arrogant to start with and thinking that because we were in IT and we dealt with networks and we knew something about broadband that we would find it relatively easy. If I am being honest we didn’t. We found it extremely hard. Not because of the technology but because it was a completely new world. Dealing with telecoms businesses [LR2] is a completely different ball game.”
Marston’s pub owners are free to choose alternative telecoms suppliers but McMinn is confident about surviving in the cut and thrust of the telecoms market on the basis of low margins, niche market knowledge and high service levels. “The difference between us and the others is we aren’t trying to make a huge amount of profit out of the deal -- we are just making enough to cover our costs plus little bit so we are able to offer line rentals at quite a low rate.”
--Tracey Caldwell is professional freelance business technology writer.