Posted on Tuesday 13 December 2011 by Ulster Business

In the hotseat

BT Ireland’s new chief executive is still settling in to the top job, but as Symon Ross discovered, he is clear about the opportunities and challenges that lie ahead for the telecoms giant.

The all-Ireland operation of BT is becoming something of a training ground for the company’s top talent.

Chris Clark, who served as CEO until a couple of years ago left to take up a role as head of BT Enterprises and his successor Graham Sutherland also recently moved to London after just over a year at the helm of BT Ireland for a job as managing director of BT Business GB.

Sutherland’s successor, Colm O’Neill, joined BT in 2009 as managing director of business in Ireland, prior to which he worked for nine years at EMC, latterly as its country manager for Ireland.

I talked to him a few days after BT released third quarter results showing a 3% rise in underlying earnings to £1.5bn and a slower than forecast 2% drop in revenue to £4.9bn.

The statement had only a paragraph on the local operation, which mentioned the progress of the company’s fibre broadband roll-out in Northern Ireland and noted that “BT Ireland revenue, excluding foreign exchange movements, was broadly flat despite the challenging economic environment”.

“I think when you look at the kind of results our competitors are posting that’s a solid performance. Revenues are in and around flat, the profitability continues to grow,” O’Neill told Ulster Business.

“I think we’re executing well on a plan and we have a diverse business, which is helping us. People continue to consider us purely a telecoms company but when you see how the telecoms sector is struggling and we are substantially outperforming at a top and bottom line level, you start to see value in the diversity. A substantial part of our business is now technology services and that has gone really well in the past few years.”

The BT CEO further comments that to deliver a similar performance to GB in a more challenging context is a good outcome. The Republic of Ireland market is generally tough and BT has found that small businesses in Northern Ireland are being slow to invest until they are more confident of the future, he said. The best performing area of the business has been in the large corporate segment.

“We are finding that the larger corporates – whether people investing here or larger indigenous organisations – are investing in technology and we’re also finding that larger players are moving more to one supplier, aggregating things they would have bought from multiple companies and asking us to do it end to end. Our diversity means we can add value for customers,” said O’Neill.

“We’re rarely going to be the cheapest. Price isn’t our value proposition, our proposition is a good service, reliably delivered, and that segment of the marketplace is really focusing on value.”

He also believes that the Republic of Ireland – where BT is a challenger rather than the incumbent telecoms supplier – represents a substantial opportunity for the company.

BT currently has a sizable businesses across the border which has been growing for more than 12 months, but still has relatively low market share, perhaps because it is again focusing mainly on the mid to large size corporate sector.

Assisting with this is the fact that BT’s fibre-based transmission network in the Republic of Ireland is now operational with its first corporate customer on board.

Fibre

In Northern Ireland, BT’s rollout of superfast fibre broadband has now reached around three-quarters coverage, with almost 600,000 premises passed and Derry-Londonderry becoming the first city in the UK to have all cabinets upgraded to fibre as part of BT’s support for the City of Culture campaign.

O’Neill notes that it has achieved more connections than originally budgeted for this year, with the target of connecting 40,000 homes by the end of December now raised to more than 50,000 due to greater than expected uptake.

“Fibre has been a big success story for us, and for our customers as well. It is a product they like and get value from. The raw speed piece isn’t a big issue, we’re finding the advantage is in a family home where multiple people can be online at the same time,” he said.

It has been pointed out a lot over the past year that the £48m project – into which BT contributed £30m and Government departments £18m – will give Northern Ireland a significant advantage and O’Neill agrees it is a massive selling point for the province, particularly where FDI is concerned.

“For us it has been a successful investment. We’ve put Northern Ireland ahead of the rest of the UK and we would argue we’ve put it ahead of the rest of the world by making this part of the world more connected than many of the major cities around the world,” he said.

“We’ve also managed to position ourselves as a vanguard for innovation in the overall BT group. We’re going to be at 90% fibre coverage by the end of this financial year. The prediction is that it will be 2017 before BT Group is at a similar point so we’re way ahead of GB.”

As he seeks to make the most of that advantage O’Neill says his goals in the top job at BT Ireland are fairly simple – to listen to customers to ensure they are getting good service and to keep costs under control.

“In the current market you can’t get out of position on your costs because your customers will find out straight away and punish you for it. So I want to make sure there is a laser focus on cost. It is probably a little boring for a new CEO but we have a good solid plan here that has been formulated under Chris (Clark) and it is something we as a leadership team have been continuing to drive through,” he explains.

“We’re very confident in what will drive our growth. That is fibre in Northern Ireland; we’re confident in our ability to drive ICT and telecoms aggregated services; and we’re confident the ROI marketplace represents a strong growth opportunity.”

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