BT boss talks up broadband

'Next big thing'


The CEO of BT is not one for nostalgia. Any talk of BT's dismal track record on broadband before he joined the company earlier this year is likely to get a prickly response from Ben Verwaayen.

"I am amazed by the energy in trying to find out who is to blame instead of 'what can we do?'," he told journalists yesterday in his office overlooking St Paul's Cathedral.

"If you want to blame BT, among others, fine. Go-ahead, be my guest. But it is not the issue."

For Verwaayen, the "issue" isn't about BT's recent past. He prefers to keep his eyes fixed firmly on the road ahead, instead of checking the rear view mirror, as he puts it.

"I said from the first day that I put a foot in this building that BT will be committed on broadband, that we will do everything in our power to make sure that Britain will be a broadband place to be, because I believe it is the next thing in telecommunications."

"It [broadband] is within the core of our strategy. Nobody can doubt it. There is no backing away any more."

Such a positive commitment from the BT boss is still a little difficult to take without an equally hefty dollop of scepticism. After all, Net users who've been around a bit will find it hard to forget the difficult and long campaign to introduce unmetered dial-up access in the UK. Nor will they forget the dominant telco's foot-dragging in bringing broadband to the country.

After all, it was only two years ago that telecoms regulator, David Edmonds, spoke of the "trench warfare" he had endured with BT over the opening up of its network to competition. Twelve months on and his views hadn't altered much as he described local loop unbundling as a "painful and often miserable process" during which time BT preferred to protect its dominant position rather than spearhead the broadband revolution.

Was it only last September that e-commerce minister Douglas Alexander finally lost his patience with BT and called on the company to "exploit (its broadband) investment more aggressively" in a bid to get Broadband Britain on track? Singling out BT for particular criticism, the minister said BT had a responsibility to drive demand, lower costs and increase availability of broadband.

Then, of course, there have been umpteen calls for BT to be broken up because of its lack of broadband progress.

That, though, was before Verwaayen took charge of the telco. From the outset, he put broadband at the heart of the company's strategy. Within days of joining the company back in February he announced that broadband costs would be cut, and followed this up with substantial wholesale price reductions just weeks later.

He also pledged to improve the performance of the DSL network and service quality, and work to extend broadband to less commercially viable areas.

There can be little doubt that Verwaayen's appearance has produced a major shift in BT's strategy. While everyone may not be happy with BT's performance so far (especially those who can't get ADSL) it is still an astonishing turnaround. Not wishing to dwell on the past, the Dutchman prefers to talk about the journey ahead towards reaching and passing key broadband milestones.

One of those milestones will be reached later this month when BT Retail begins a major marketing push for its no frills, access-only broadband product - BT Broadband. On September 22 BT Retail, its massive customer-facing division with 22 million customers, will begin its largest broadband marketing campaign so far in a bid to ramp up demand.

The company has set a target of reaching one million broadband subscribers by 2003 and five million by 2006 - much of this on the back of its no frills service.

"We’re going to make sure that everyone in the company is focused on the importance of broadband," said Verwaayen.

But BT's decision to provide an access-only service from its main customer-facing division has not been without its critics. Freeserve warned that BT was being allowed to dominate the broadband marketplace and exploit its dominant position as the leader of fixed telephony services.

Others, including industry analysts, believe that the no frills service, which doesn't even include email, is lacklustre.

But there are also more fundamental questions associated with this move, such as the relationship between BT Retail and the telco's mass-market ISP business, BTopenworld.

Earlier this week the MD of BT Retail, Angus Porter, speculated that if the no frills BT Broadband service proved to be a runaway success it could result in BTopenworld being swallowed up by BT Retail.

Verwaayen was more circumspect - stressing that BTopenworld's full ISP service and the no frills BT Broadband product were there to give people a choice.

Asked how the launch of BT Broadband would affect BTOpenworld he said: "That's what the market will decide."

Indeed it will. And time will tell if, in the future, Verwaayen allows himself a sneaky look in the rear view mirror to see how far (maybe) he's travelled down that broadband road. ®

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