Kevin Taylor,COO, Asia-Pacific region, BT Global Services

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Kevin Taylor,COO, Asia-Pacific region, BT Global Services

February 15, 2008

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After being granted national long distance (NLD) and international long distance (ILD) licences, British Telecom (BT) is now in the process of gaining a stronger foothold in the Indian market. The company intends to increase its exposure to multinational companies across diverse verticals including manufacturing and logistics. On a recent visit to India, Kevin Taylor, chief operating officer, Asia-Pacific region, BT Global Services, spoke to tele.net about BT India's expansion plans, future thrust areas and the key concerns in the Indian telecom sector. Excerpts...

How do you perceive the opportunities in the Indian telecom sector given the recent simplification of ILD and NLD norms?

The opportunities in the Indian market are fantastic. There is tremendous growth in a large number of industries and frankly, it is up to us to follow our customers. Wherever they are, BT needs to be there. There is a huge demand from large Indian multinationals not only for network services but also for innovative services such as call centre capability, security capability and unified converged capability. We need to provide these services to multinationals across the country. Hence, we will continue with the expansion we have had with our "21CN program" across the world and with the expansion in nodes that we have implemented in India.

BT has invested in India at the right time. You have heard the Intel phrase, "Intel Inside". For BT, we have an India inside. BT could not have operated globally today without India. So, for us, it has been a fantastic approach and we love working with large Indian multinationals. We will continue doing so.

Why only multinationals and not other Indian companies?

Historically, our international customers became our Indian customers. However, we are now focusing on Indian companies. We were fascinated with the current trend of investments in rural communities. With micro finance and different business models moving out to rural areas, BT too would like to invest not just in the metros but also in the country's 600,000-odd villages. I think we now have the communications capability and the wherewithal to really make a difference. We will now see more and more domestic Indian companies as part of our portfolio. We are driving towards setting up a full-service business in India including a corporate engineering portfolio and service centres. By 2009-10 our business in India will be worth over $250 million, which is a tremendous opportunity for us.

What is BT's current level of business in India?

We have a large presence across many verticals including finance, information technology-enabled services (ITeS) and the business process outsourcing (BPO) industry. Though we are currently more focused on the finance, ITeS and BPO industries, we hope to invest more in other industries like logistics and manufacturing.

What new technologies and services can an enterprise consumer expect from BT?

We are focused on solutions. Our customers both worldwide and in India want the right financials which give shareholder value; they want operational improvements so that they can add value for their own customers.

BT was one of the creators of multi-protocol label switching along with AT&T. We are always looking at new innovations. New technologies like Wi-Max and Wi-Fi can effect a huge change in the industry in terms of last mile access and make it easier to reach communities across the country. They allow people from enterprises to connect to our networks more easily. We have seen new business models developing with BT at the forefront. We see hosted call centres across the world, which is the key to the success of some Indian multinationals. Whether they are coming up in Eastern Europe, Africa, Latin America or China, these call centres are able to get an office and suddenly, they have the same call centre capability in that office as they would have had anywhere else in the world. They are also looking to pay for it in different ways. For instance, they pay for it in terms of usage rather than paying directly. In that respect, we are seeing a lot of changes both in architecture and technology, and this is really exciting.

In India, the expectations from our services are massive. Like every country in the world, everyone here wants something yesterday. We can bring new propositions, a new portfolio and new solutions to the market, not just products that work for the business outcomes of companies. We already have a service hub for Asia in India at Pune.

How will the acquisition of i2i benefit BT and how does this figure in your strategy?

That was the fastest integration of any acquisition we have ever made in the past. We have integrated that fully into our business within just six months, which is absolutely fantastic. It broadens our customer portfolio, enhances our skill set and provides a much stronger service model to companies. One of the things that i2i is good at is turning things around faster. We have learnt from the acquisition of i2i how to serve our customers better. This has been a tremendous acquisition for us.

As a group, BT has made 16 acquisitions in the past 22 months. One was in Asia, i2i. We are looking for one or two acquisitions in India. We haven't found them yet but I hope we do so soon.

What are BT's future thrust areas in India?

We will continue focusing on large multinationals. As we are growing, we are being pushed into managed land – managed CRM, hosted IP telephony and data centres as they become virtualised. We are being pushed by our customer base into all of these new areas. Our focus will be on developing these for Indian companies as well as for Western companies that have invested in India. We see Indian domestic companies also taking advantage of some of the things that are being introduced in the market. We will focus on more of the same, but at an accelerated rate because India is moving at a rapid pace. If the market moves at a 100 miles an hour, we need to move at 110 miles an hour to be there with the solution before our customers gather.

What are the current telecom trends throughout the world?

BT started the trend of managed and outsourced services about three or four years ago and that was a tremendous success. I think that there is now a trend of companies realising that networking communications are at the heart of any company. They also realise that they are not experts in networking communications; they are experts in their respective fields. For instance, banks will be experts in financials and different business models in finance. Similarly, manufacturers will be experts in manufacturing and supply chain optimisation. But they are not experts in communications. We are the communications enabler.

What is BT's market share in India?

I am not quite sure about the market share. Without being exact on the percentages, my sense says that among international network companies, we are probably the leader in India. We are moving into value-added services and are moving faster than any other company into that space. We win a high percentage of the deals which we bid for. We listen attentively to the customers' needs and then customise our products and services accordingly. Customers today are pushing us into adopting newer technologies and this is no easy task given the speed at which the market is growing.

Obviously local companies like BSNL, Tata Communications and Bharti Airtel are much larger and we would want to work more closely with companies like, say, Bharti, to make sure we give the Indian customers what they want. I think there is huge opportunity here.

What proportion of its revenues does BT expect to achieve from emerging markets and from India in particular?

I think it is a merged market. Since we are focusing on the Asia-Pacific, we are looking at revenues of at least $250 million from India in the 2009-10 time-frame. We have a very clear strategy in the Asian region – to be at about a billion euro within the next 18 months. We have grown immensely over the past four years, perhaps after reinventing BT some five years ago. This tremendous success can be attributed to our customers, who have been driving the success.

Moreover, BT is a global company and our competitors are international. The key to our success, however, lies in the fact that we operate on local terms and can fit into the local environment.

Where would you place the Indian telecom market vis-a-vis other emerging markets like China for instance?

For us, it is fantastic that India has started developing its market in terms of telecommunications. I think partnering with BT and other companies outside India will accelerate the communications capability of the country. India today allows 74 per cent of FDI; we would like it to go up to 100 per cent. I think international companies in India will really improve the efficiency and productivity of the country. That is the same for China and elsewhere in the world.

China has got a long way to go before it gets to the regulatory position of India and that's a huge advantage India has. The other advantage that India will have is a 300 million English-speaking population by 2010. This will give India tremendous competitive advantage round the world. It has an entrepreneurial advantage too and has more experience in trading with the world. China has built its infrastructure ahead of its businesses while India has sort of muddled through the infrastructure in a wonderful way but somehow, it all works.