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Japanese telecoms giant NTT has chosen London as the global base for its newly launched ICT services business, NTT Ltd, flying in the face of concerns over the stability of the UK economy in a post-Brexit environment.
NTT – which stands for Nippon Telegraph and Telephone Corporation and holds an incumbent position in Japan similar to that of BT in the UK – is forming the new firm by bringing together the capabilities of 28 separate global companies it currently holds – including NTT Communications, NTT Security, and integrator Dimension Data, into a single $11bn (£8.6bn) business with over 40,000 employees in 70 countries.
The businesses forming NTT Ltd boast over 10,000 enterprise clients worldwide in multiple verticals, including energy and utilities, financial services, pharmaceuticals and telecoms.
It notably works alongside the Amaury Sport Organisation (ASO), the parent body of the Tour de France, to provide technical services for the world’s largest cycle race, as well as sponsoring its own UCI WorldTour team, Team Dimension Data for Qhubeka (which despite the retirement of the Dimension Data brand in Europe retains its current name for the rest of 2019).
It claimed that in bringing together its various holdings, it can offer enterprises access to a more comprehensive range of skills, a wider range of technologies, a global services organisation, and more in-depth solutions, all backed with more investment in innovation and R&D.
Speaking to Computer Weekly, NTT Ltd’s newly appointed CEO, Jason Goodall – previously group CEO at Dimension Data – said a number of factors had influenced the decision to base the business in London, not least basic geography.
With around half of its clients in the UK, Europe and the US, being in a central time zone will let NTT serve them better than it could from Japan, eight hours ahead of Britain and 13 ahead of New York.
But this is not the only reason, said Goodall: “We want to be in a position where the country DNA gets digital transformation. The UK has created more unicorn tech companies than any other country in Europe [and] we want to be based in an economy that is more vibrant around innovation, aligned to digital transformation, and fuelled by the right skills.
“It almost becomes a self-fulfilling prophecy because as more companies get established, they create demand for skills, educational facilities start meeting it, and so it goes on,” he said.
“We think digital could potentially be the next wave for the UK economy. Banking drove the last 15 to 20 years, we think tech could drive the next 15 to 20, and we want to be part of that,” added Goodall.
Goodall acknowledged concerns over the stability of the UK economy in the post-Brexit environment, but said these mostly related to the stability of NTT’s business in the UK – the UK business generates $800m, employs 3,000 and operates 17,000m² of datacentre space – because as a digital-first business it was less subject to material concerns such as future trade tariffs.
“Britain has a longstanding and proud reputation as a global tech leader and it’s fantastic that NTT Ltd. has chosen London for its global headquarters. A key part of our modern Industrial Strategy is to put the UK at the forefront of the tech and data revolution, and they will join many other world-leading companies who call Britain home,” commented prime minister Theresa May.
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The underlying rationale behind the merger of so many disparate units dates back some years, according to Goodall.
With most of the 28 businesses having been acquired in the last decade they had already been collaborating on product and service development, client projects, cross-selling and seeding new opportunities. Indeed, said Goodall, NTT estimates it has done around $1bn worth of collaborative selling in the past 12 months alone.
“But one thing we could have done a better job at in terms of being of more value to our clients is making them aware of the capabilities we had,” he said. “We didn’t do a bad job, but we can obviously do a lot more. At the end of the day, clients are looking for an experience and they are less worried about how we deliver that, they are interested in their user experience.”
“We want to be able to make sure we can deliver a differentiated user experience, and the easiest way to do that is to have more control over the building blocks.
“The fact we own the datacentres, the fact we own our own physical network infrastructure, and security; we can string those elements together and have more control over each aspect of the supply chain. That gives us a better chance of delivering a seamless user experience.”