BT chief executive Ben Verwaayen yesterday admitted that the telco must cannibalise itself to survive: “Customers come first and we know that we have to cannibalise ourselves to make progress for the future,” he said.
The interview on BBC radio last night follows a series of public statements that have seen Verwaayen go some way to re-branding the company as a ‘new wave’ business-to-business (B2B) provider in the light of declining growth in call revenues.
However, he confirmed the view that new business is not as lucrative as the old call revenues business: “Our critics say the margin on our new business lines is not as good as margins on the old landline business. That is true because if you start up something it is something different from something you have had for generations. We are improving on that.”
“Fixed line is still important, but 12 per cent of our revenue is now calls from consumers. Most people associate us with that but the whole consumer business is less than one-third of what we do. Very important, but that means two-thirds of our revenue comes from business-to-business activities.”
He claimed BT has a unique B2B offering: “We sell networked IT services; we signed over £18bn of business globally in the last three years such as with Nato, Reuters, Honeywell – that is unique because we have a telecom and a systems integration background.”
Once again he confirmed BT’s aim to be a player in the growing market for broadcast services, but stopped short of saying it will compete with existing market leaders: “I don’t think we will be competing with BBC and BSkyB. Broadband is fantastically important to provide two-way communications and to enhance the TV with more interaction."
He also rejected the idea that the company needed a new name that reflected the open market in which it plays: “We do not need to change our name. There is something [in it] about history and about credibility. We are proud to be a company that has served this nation for more than a century.
“Ultimately our customers are changing our business. What we sell most is broadband to UK business and consumers and we sell business services around the globe for an increasing number of leading firms.”
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