Interview: BT CEO Gavin Patterson

National broadband network: A challenge and an opportunity

The national broadband network is generally written about in terms of domestic access for consumers but, of course, it is extremely relevant to the enterprise CIO, and in a way, its existence bridges the gap between two worlds that, at first glance, appear quite different.

“The network is key to the CIO because IT is increasingly being delivered over the network via the cloud,” says Patterson.

“We’ve found that over the past six months or so the concept of Cloud of Clouds – using BT’s network to connect people to clouds that they want access to – is proving to be something that really resonates with CIOs.”

“Making some changes to the existing model – removing duplication, if it exists, within existing regulation, enhancing some of the expectations where appropriate – is a better way forward than looking to spend our time breaking up BT”

Gavin Patterson, BT

Patterson sees the network as both a challenge and an opportunity for the average CIO. Clearly it is an enabler of productivity gains, growth in jobs and even intra-enterprise devolution. The challenge, he says, is that the networking sector is a “very dynamic market” and, in terms of customer needs, one that is evolving very quickly.

“For CIOs, for network operators, for hardware vendors, just keeping up is challenging,” says Patterson. “The network is now used 24/7 for voice, data and video, and in terms of the resilience of that network, the service, provisioning, repair and quality of that experience, everybody who runs a network needs to realise that expectations are very high.”

Looking back five or six years, it would be fair to say that BT’s services business was the problem child of the family. According to Patterson, however, in spite of some short-term headwinds, the overall demand from multinational customers for a single network system from a single supplier, with overlays such as unified communications and security, means Global Services is now back on track.

“It’s the key to being able to operate in a global environment rather than being limited to domestic opportunities,” says Patterson. “We see this even in the SME space. In Cornwall, where superfast has been rolled out more extensively than anywhere else, it’s changed the way people have been able to run their businesses, and there are some fantastic case studies demonstrating how people have been able to run businesses on a global basis out of quite remote parts of Cornwall.”

This neatly brings us back round to the other plank of BT’s business: Its ownership and stewardship – through its arms-length local access arm Openreach – of the national fibre network, and the subject of most of the column inches BT has generated in the national press lately.

Ringing the changes

Indeed, Computer Weekly met Patterson on the day Ofcom released its Connected Nations 2015 report, revealing some insight into the accelerating take-up and use of broadband and mobile services around the UK. In 2016, things will get even more interesting when Ofcom’s market review concludes, setting the regulatory agenda for the telecoms and broadband sector for many years to come.

A key decision that Ofcom will have to take will be the potential split of BT from Openreach, and Ofcom’s Sharon White has said that it is unlikely the current model will be retained, although how far the regulator will go remains an unknown quantity at the time of writing.

Critics say BT is being allowed to subtly recreate its old telecoms monopoly when it comes to fibre broadband, but BT has countered by saying that the nuclear option of forcing Openreach’s independence would risk huge damage to its ability to invest and benefit from being part of the wider BT Group.

Right now Patterson will not be drawn on these risks, but he remains confident that he has proposed a strong case on BT’s behalf, and says the benefits of it can be seen both by Ofcom and the government, who ultimately want all network owners to play a part in providing the national network.

“From that perspective, making some changes to the existing model – removing duplication, if it exists, within existing regulation, enhancing some of the expectations where appropriate – is a better way forward than looking to spend our time breaking up BT,” he says.

Patterson contends that it is no accident that the current model has resulted in a situation where take-up and coverage in the UK exceeds that of the other major EU economies and the US. Can that model be improved on? Very much so, he says.

Nationwide broadband needs collaborative approach

“You’re misguided if you think you’re perfect at anything. There are things I’m sure service providers would like us to do better, and there are things I think we could do better too. Clearly keeping up with demand and expectation on service is an area we need to step up to, but so do service providers.

“That’s why I say it’s a team game; we’ve all got to step up. We are demonstrating that we manage it on a completely arm’s length basis and that is an area we can improve transparency around. At the same time I would hope that some of the existing undertakings could fall away because the EU telecoms framework has superseded it in many ways, so it’s unnecessarily complicated,” he says.

Playing a team game is also vital when it comes to finding appropriate delivery technologies to address the needs of rural broadband users and those left out of BDUK – the final 5% – says Patterson.

“I completely understand the frustration. Finding a solution for the final 5% is very important, but it is not simply a BT problem. Others need to play a role. We are happy to do so provided we’re able to make a fair return, and the regulatory framework allows us to do that,” he says.

Patterson will be sharing his own views on the matter with the government when it consults over its ambition to guarantee a universal 10Mbps service in 2016. Hinting at the position BT may take, he says he believes that FTTC-based broadband has some way to go to take coverage above 95%, as the money recovered by local authorities through gain share clauses in their BDUK contracts is reinvested.

“If that is invested back into the network that’s worth another percentage point of coverage in itself. We think the best solution for the remaining 4% is more fixed fibre because it provides more flexibility than some other technologies. It is a shared problem, but one we think we can play a role in solving,” he says.

How Patterson sets about solving these deeply entrenched issues of national relevance will ultimately affect the day-to-day lives of millions of people up and down the UK as they run their lives and their businesses online.

Quite simply, the network is the backbone of Britain’s digital economy, and whatever may happen in the next 12 months from a regulatory perspective, this will not change. In that regard, BT wields enormous influence over all of us, both now and into the future.