Capacity’s offices are just off Fleet Street, synonymous with the offices of most of the UK’s national newspapers in the past, and a couple of weeks ago I made my way over to visit Damien Staples at BT’s St Paul’s Cathedral offices.
It’s been a very busy year for Staples and after we exchange pleasantries it’s straight to business. He tells me how time has flown over the past 18 months and details how at the start of his tenure BT “restructured the way we serve the market outside the UK by centralising our voice business into one vertical from people and P&L perspectives”.
Staples has end-to-end responsibility for global wholesale voice across all of BT, “that obviously means we’re custodians for all of BT’s retail traffic, both consumer and with EE now as well,” he says. “But there’s a big element of the business working closely with our wholesale partners globally.”
“The focus that we’ve created by bringing this all together into a centralised vertical has really helped us to hone in on profit and improve the cash contribution that BT has from wholesale voice,” says Staples.
Interestingly, he says, the top-line has become less of a focus for BT. “Voice is actually declining,” as the company is trying to ensure it is improving profitability and extracting as much cash as it can. “This in large part involves making sure the team do the right thing in terms of how they trade voice and how they carefully manage the business, limiting our exposure to FX and fraudulent issues. We all know in this industry that’s becoming a big challenge.”
Staples says BT has made a lot of capex investment in its systems, tools and platforms to better manage voice and protect its business from increasing exposures. “That’s been really positive,” he adds, as “the business has been a lot more predictable than it was 18 months ago, and we have a very clear strategy today focussed on healthy business and managing the retail traffic which we have from within BT”.
Roaming & brexit
The roaming side has seen a lot of activity over the past year-and-a-half on the basis of having acquired EE in January 2016. “We went through a very rapid period of integration, which started in March/April last year,” Staples says. Historically, roaming within EE had been jointly managed by EE itself, but in partnership largely with its previous parents, Orange and DT.
From an integration perspective, BT is nearly there. “There was a huge push and operationally, in terms of people alignment and restructuring of teams, that was all done very quickly,” Staples says, adding that its platform has come a long way over the last 18 months. “From a wholesale standpoint, functions are now fully integrated and we’re just in the process now of looking at and working through bringing together the commercial roaming and interconnect functions with IoT and investments in M2M, which is becoming an increasingly big focus for us in the UK wholesale market.”
Staples and his colleagues are at present thinking carefully about how best to leverage investments it has made, the structure it now has in place for the roaming team to leverage, and support the substantial investments it is making in IoT and M2M. “This is a big focus for us but being driven by our UK wholesale team.”
“So EE, and BT for that matter, had to overcome a bit of a learning curve to establish ourselves again in the roaming wholesale space as a standalone business and with the BT brand,” admits Staples. “That meant going out and to some extent leveraging our existing wholesale partnerships. But it also meant establishing new relationships, all the while trying to make sure that we are delivering net improvement in the cost base for roaming in the group.” This was hugely challenging for Staples and his team, particularly given the context with developments with roaming regulation in Europe.
Although this is great from a consumer perspective, being able to roam around the continent just as if you’re at home, this has caused an obvious disruption and created a big challenge for BT. “This is very challenging from a business perspective, both in terms of BT’s retail revenue and the costs that are still associated with roaming. Roaming is not free from an operator, they still pay to make this possible,” Staples says.
Sticking with a regulatory theme, I ask about the extent that BT are or are not preparing for Brexit. His response is the same as many people in the industry: “Of course we’ve spoken about it but it’s in the back of our minds. We don’t know what the rules will be and, what relationship we’ll have post-Brexit with the EU. Until that becomes clearer it’s not worth us spending a lot of time on it.”
There’s a lot of change in the market and that will continue over the years, Staples says. “Who knows where the market will be. Will we still be charging for roaming in the same way that we are today? Will those relationships be structured in the same way, things could look quite different from both technical and commercial perspectives in two or three years’ time post-Brexit.” That’s the timeframe that he and his team are working to, so to go guns blazing now when the scenario is very hypothetical, he says, would be premature.
The last time we spoke the discussion centred heavily on EE and the creation of the new vertical that Staples now manages. “That’s when we decentralised data and now in BT we have sales in the region for global services. From a buyer side data trading is still driven from our procurement function centrally. “There are aspects that I believe have worked really well,” Staples says. “How we manage our costs to support our global enterprise customer commitments, but there’s still things we can do to ensure we’re maximising utilisation of our own assets and we’re looking at that at the moment.” Staples stresses that the two areas which BT still has work to do on is looking how it can better leverage its data and subsea assets, so “access and subsea,”
“Equally, in the context of roaming, how can we better integrate the commercial roaming functions with what we’re doing with IoT and M2M?”
Becoming even more digital
BT has made a number of investment announcements surrounding its support with dynamic network services (DNS) and this is “very important to the future services we provide to our global enterprise customers”, Staples tells me.
Evolving Relationships
Staples doesn’t believe that voice is dead, as it often discussed and debated in the industry, but that “traditional voice as we know it is declining. People are still making calls they’re just being made in a different way, for example with VoIP calls”.
“Some of the most lucrative partnerships we’ve developed over the past 12 months have not been with traditional carriers,” discloses Staples. “By working with these players we’re helping the industry to evolve.” Which stand out? He declines to say as BT is in the process of closing a few deals “We recognise voice will change. It’s feasible from a revenue perspective that voice could grow and with a healthy margin, but it won’t look like it traditionally did. Back it up with a good brand, the right protection and right quality and in that context, there’s business to be done and business to be won.”
Staples moves on to market trends and collaboration. “What is a carrier now?” he asks. In wholesale BT isn’t just dealing with carriers. “We’re looking more broadly than our traditional carrier relationship base in the interests of better serving our customers and enhancing our revenues. The bringing together of data and voice in the carrier space was positive.The work we do with KPN has been very interesting, working better together to drive better deals for both parties. We’re not looking closely enough at how we leverage our own assets in terms of utilisation, one of my main focus areas, evolving our business and partnerships.”
“Conversations at industry forums, like the GLF, are great,” Staples says. “We all want to work closer and talk often but there is opportunity if we can think collectively. Maybe it’ll end up looking like a global footprint, where we all have a view of what everybody has.” He admits he doesn’t know how this would or could be created.
“The same is equally true in voice,” he says where shared assets and knowledge could create a stronger offering for the sector. He is passionate about it, often speaking to Tier 1 partners to find out what the evolution of the market will look like. Maybe the answer sits above wholesale, Staples believes. “Perhaps we need to work closer with Tier 1 partners, see how they work together and if you can figure that out and then you’d have a fuller footprint of assets which would bring vast benefits.”
So lots of plans are afoot for the Global Wholesale Voice team within BT, but the group’s will centre on how best to leverage the business and assets it has to underpin growth areas for IoT and M2M, which will dictate its success over the next few years.
