Ipek Cem recently met with Olivier Campenon of British telecom. They discussed a wide variety of issues including technology convergence, BT's presence in emerging markets and upcoming telecom trends.
Ipek Cem: Our guest today is Olivier Campenon from British Telecom. Welcome to Global Leaders.
Olivier Campenon: Thank you. Good evening.
Ipek Cem: You are currently in Turkey, and it seems like you are strengthening your business in Turkey, and the region. I must say. What is the purpose for this trip, and what is your outlook for Turkey and the region? Meaning emerging Europe and also the Middle East...
Olivier Campenon: Let me first say that you have a fantastic, wonderful country, so it is always a pleasure to be here. But it is true that today that we have announced, and presented, our ambition for Turkey. As a matter of fact, BT has been working and serving customers in this country for the past three years. But we think that we have reached the point where we can now give more perspective, and declare ambition, and we have a... quite large ambition for the country.
Ipek Cem: What is the ambition?
Olivier Campenon: Well, if I would put it simply, is to triple our business here in the country. Now what does it mean? We are serving large customers. BT is refocusing on this market. By serving large customers, it means serving them with global services. And if we are here today it means Turkey is becoming more and more effective in attracting foreign investment, attracting foreign companies to be here and develop their presence. And when they come here, they need telecommunications resources. They need telecommunication services. That's why we go with them.
Ipek Cem: I know that you have multinational customers, which you service all over the world, and probably you are servicing them in Turkey as well. In addition to this group, what kind of a different client base do you have in Turkey? Or do you hope to have, I should say.
Olivier Campenon: We currently have around 250 customers in Turkey. And you are right. The vast majority of these customers are foreign companies who have already been here and have asked for service in the country. I mean, examples like Unilever, like Visa, are our customers and I'll give you some examples, I guess, of what we do for them. But we are also serving few, today, hopefully more tomorrow, Turkish customers for the same type of needs. How to help them being connected to the rest of the world. And therefore having telecommunications services which enables them, in a secure way to be connected with either their customers, or even their own over presence, point of presence outside of Turkey. So let me give you a last example, is... we are also working with Turk Telekom, as a customer, but I am sure we will come back to that.
Ipek Cem: Yes. We will come back to that. In fact I want to continue with the privatisation theme. British Telecom, itself, is the result of a 3-phase privatisation. From the 80s to the mid 90s it was privatised. And now it is kind of redefining itself from being UK based, to a global company. This has been going on for some time. It is not a new phenomenon. Can you give us a sense of how this privatisation was rendered successful?
Olivier Campenon: Maybe let me start.... And as you rightly picked up, that our brand is now referred to "BT". And in this country, somebody may think it means "Bilişim Teknolojileri, but in fact it used to be...
Ipek Cem: Not too bad.
Olivier Campenon: Thank you. But it used to mean "British Telecom". But given our global ambition we thought that it was not appropriate, because we are not limited to the UK. Neither are we limited to telecommunication. So we are now referring to the brand as being "BT". The privatisation comes back in the 90s, and it's been a long process. But it proved to be very successful for two reasons. One, I guess, because we had, we have had a very large number of shareholders. So BT today is having more than five million shareholders, which gives pretty good strength in our ability to develop. And two, is we have had a regulator who has kept pushing BT on the innovation side. And today BT is one of the leading service providers based on the strong innovation platform.
Ipek Cem: I wanted to ask you... going back to the Turkish Telekom privatisation... there was a lot of controversy, because this privatisation was planned for such a long time, and it was a highly contested matter as to who will win it. After the fact, there is a lot of negative press about what Turkish Telekom has achieved so far. We know that mobile companies are flourishing, and when the Turkish Telekom was privatised, the expectation from the consumer side was that they are going to make the company move, because it was in State hands. Maybe lack of resources, lack of money. Now this is no longer the case. What is your take on why that has been so slow... for Turkish Telekom?
Olivier Campenon: Privatisation is a complex process, as you said. And it is even more complex for a telecommunication environment, because you are talking about heavy investment, and you are talking about a number of technological resources that you need to have. In the case of Turk Telekom. Privatisation is quite a complex process, and I respect the fact that it takes time. I also respect the fact that, as a customer, we always expect more... and quicker. In the case of Turk Telekom, I believe that it is now starting proving some progresses. And as a matter of fact, BT has been asked by Turk Telekom to support and provide them with consulting on the best way to accelerate their transformation. There are few large operators in the world that went through the transformation as far and as deep as BT did in the past 10 years. So we have acquired that know-how, and we are now working with a number of operators throughout the world on this. In the case of Turk Telekom, we are actually providing them with a number of key managers, executives to help them in reshaping the company, and putting it in the right direction.
Ipek Cem: When did this project commence? Is it...
Olivier Campenon: The project was signed last year. And is to be continued over the year.
Ipek Cem: Over the year, and then it's going to be extended, or it's up for discussion...?
Olivier Campenon: Well, it's up for discussion, but I'm definitely expecting it to be continued.
Ipek Cem: OK. When you look at the Turkish connectivity scene, let's say... in terms of mobile, in terms of fixed, and also in terms of the internet... we see a big flourishing in the mobile section, and I know that BT is working on fixed-mobile convergence. Can you explain to us how this convergence is taking place? And what kind of products or services are related with this, that can help people?
Olivier Campenon: Sure. Well, I don' know about you, but I am sure that if you were to ask the audience, and spectators how many directories they have to manage between the directories on their mobile phone, the directories at home, the directories on the PC... how many times they wonder which phone to be used? That's the customer issue. So BT decided to answer that question by combining it into one. And the idea is very simple. You have one phone, one mobile phone, but when you walk home, the mobile phone becomes the home phone, and switch back to your broadband access. But when you walk back to the office, the same phone switches back to your work phone. Simple. Easy to say. Very difficult to implement.
Ipek Cem: I was going to say.
Olivier Campenon: It took us some years, working with a number of equipment vendors, and along with a new IP platform, new network that BT has developed in order to enable the capabilities. It has now been launched in the UK, and of last year, and it is developing well. We are getting a thousand new customers a week. Outside of the UK, we intend to propose it to our corporate customers, because as I said, we are more focussed on corporations outside the UK. So we will do that, and obviously when we get to the right level, we will also do it in Turkey. That will enable customers, again, to use their mobile phone as one handset only, and once they are back to the office they can automatically switch it back as a working, working phone.
Ipek Cem: This should involve lots of agreements, I would think, between different kind of operators: the fixed lines; the mobile; you name it. And other services. How is this handled?
Olivier Campenon: Right spotted. The complexity of it remains in the fact that you want to converge several players in to one user friendly experience for the end customer. So it takes time. It takes time, because you need to negotiate with the mobile operators. It takes time because you need to have a broadband access. And one of the key development that's going on in this country is the ability to expand on the number of broadband access. Broadband means that at home you will suddenly have through the simple telephone plug, access to what is so-called the triple play / quadruple play, access to the same plug through telephony, mobile, internet and TV. And watching your TV news.
Ipek Cem: And how does that work in terms of competition between all these players, because we oftentimes think mobile is competition for fixed. How is that issue handled? If you give me as the customer the choice then I will maximise... optimise... my telephone bill, hopefully through such a system... but how does this work with the other vendors?
Olivier Campenon: Well, and you are absolutely right, and I guess we all should be a consumer, or a business customer, we are always trying to optimise. But we also want to optimise it with a certain level of quality, and a certain level of service. So we want to make sure we will use the BT for you to manage all this telecommunication. The idea of the convergence is in fact to use the most qualitative, and cost effective network, at any point in time. And mobile is fine, but it is expensive. So that's why, if you can switch back your call on your fixed line, then it's benefit for the end customer. Now from our perspective, and I'm sorry because I'm going to be a little bit techy here...
Ipek Cem: Good. Good. Good.
Olivier Campenon: ...but from our perspective, BT has been the first to initiate a heavy transformation of our own platform by investing... and we keep investing... 20 billion dollars on our new platform named "IP Network". We actually refer to it as the 21CN with marketing...
Ipek Cem: 21st Century.
Olivier Campenon: 21st Century, absolutely. 21st Century Network. But just to say that we entered into a new century, and we entered into a new era of telecommunications where it doesn't matter if it's mobile, or fixed telephony, or if it's data, video, or voice. All this can be encapsulated onto the same platform, the same network, and once you've done that, "Bingo!". If I phone you, and you're not available, that phone can be transmitted as an email, or as an SMS on your mobile phone. So you suddenly can easily transform the message in one or the other media. That is the flexibility that any customer should expect. And again, in Turkey, that will be driven by the development on both the network, that goes with the broadband, and obviously of the competition, because competition creates innovation.
Ipek Cem: So just to get it, to get it precisely right, the system or the network is going to make theses intelligent choices for me? The consumer? Or am I going to make these decisions for myself?
Olivier Campenon: Hopefully you will always be in the decision place. So we will not make the choice on your behalf, but what we want is to offer you the choice. And having a common platform enables us to develop a number of bespoke services, customised services only for you. Let me give you a simple example. With one of these fusion phone, as we refer to it, the convergence phone, as... with one of these fusion phone, when visiting a friend you will be able to place a call using your friend's network, but being invoiced on your bill, and not on your friend's bill. It is it something very flexible to your own use, and that is enabled by the new technology.
Ipek Cem: I was going through your web-site, and some of the new technologies were really interesting, but some of... one of the things that struck me was this cooperation between Sony Playstation, and the ability to bring in calling... live calling into that. Can you talk a little bit about that? And how that would change the Playstation product? Because it is such a popular product.
Olivier Campenon: Well, let me maybe first put it in perspective. What you are referring to is something that is being developed in the UK. And again, and in a while I come back to what we do in Turkey. But in the UK, the simple answer is "Everything is getting connected". Including your playing... your Sony Playstation, and the whole idea is to ensure that through our network we enable players to work together while they are seated kilometres, or miles away, and using the same Sony Playstation as they have. So the value of the service is for the players... kids, and sometimes adults... they can actually enjoy playing with others remotely without knowing them. That's the beauty of telecommunication. But when it gets to what we do here in Turkey, and what we do throughout the world, we are really more focussed on helping the large corporation... should they be foreign corporations, or Turkish corporations... in benefiting from these new services, and from this new telecommunication resources. If you're a company today, and you have definitely to use the best tools to manage your company. One of the most difficult one is the financial tools. How do I know, how do I measure what it is I do throughout the world? To do that, yesterday, you would be buying what we called an ELP system, to any other providers, and then we buy a network. You can't do that anymore because they are so interdependent that you need to make sure that whenever you built new financial systems it is fully connected, and inter-connected. And to ensure that your users, your internal customers will be able to access to it on real time. That's what we do.
Ipek Cem: In this region, in addition to corporations, governments and public entities are also modernising. And I know that you have a big base in Dubai, and that region is also booming, changing very rapidly. Are you working at all with governments or public entities, or semi-public entities?
Olivier Campenon: We do... we do want more. This, you rightly said, especially in this region there is a growing demand from any of the government organisations to benefit from this new wave of telecommunication services, and to give you two examples where we are working closely with some of the governments, one is security, and the other one is health. Because on both security and the health, BT has developed quite a unique experience out of the UK. And by security I mean not only physical security, which is referred as CCTV – so you have a TV network which is controlling through cameras – but we also do information security. So we are making sure that wherever the data is available, it is available through a high level of security. That's one fold and, again, it's a growing demand from many governments, especially in the Gulf. The other one is the health. What we can see is in most of the countries, everybody is facing the importance of having a personal data file which says what it is you are: who you are; what type of diseases you've had; what kind of medicines, and drugs you are taking. Making sure that any doctors that will help you is having access to this information. Easy to say. Very complex to organise. That is where BT is now is helping a number of the government, and working on these proposals.
Ipek Cem: Would this even come in the form of a card that would hold this information and you can carry with you? Or is it more from a filing perspective to have everything together for the governments and the hospitals and the doctors sake?
Olivier Campenon: It's a very good point. It's often both. That is to the decisions of the government and the ministry. Obviously it has different impact, different cost involved. Usually, you need both, because usually you need to have on your card the minimum identity information, and the minimum information, again, on your health, but it also requires a more compelling file that is accessible through the internet on the secure way, wherever, whoever you are working for a dCampenontor.
Ipek Cem: Is this, for example, a system working already in the UK, and you are adopting it, adapting it for global use?
Olivier Campenon: That's exactly the idea. BT has been working with the national health ministry to implement one of the most ambitious programme that exists at this stage. And again we've been working with others, I mean we are leading the project, but we are working with Accenture and a couple of other providers, and we are now implementing it for all of the British households. We are using that experience, we are using that expertise, and we are presenting it to the rest of the governments.
Ipek Cem: When I was looking through your Annual Report at the way you define your business, you kind of put it in two categories. One is the existing business in te UK... how to enhance, and add to that, and keep it competitive, and then you talk about the new wave which includes global.
Olivier Campenon: That's right.
Ipek Cem: So when we look at that component, the global business of BT, how is it growing? What are some of the success stories? What are the regions that you feel are going to really take off? And why?
Olivier Campenon: Turkey is one of them.
Ipek Cem: Yes. I hope so... for our sake.
Olivier Campenon: You figured that out. But clearly Turkey is one of them. Not to bombard you with figures, but just to set the picture. We've announced our yearly results, that BT has grown by 4%. We are now a 20 billion pounds company, with over 100 thousand employees. So, pretty consequent company. While we grow at 4%, as total, we grew by 17% outside of the UK. So that's the growth engine. And that's why we are so focussed. We're growing in America, as in Western Europe, but we also opening, and investing, and growing into the so called emerging countries. And the reason is simply that we go where our customers go. And while yesterday a number of these global companies were looking at globalisation as just a means to reduce cost, "Let's move our plant where the labour costs are lower". They now move to the next stage of globalisation, which is about going where the market demand is. And guess where the market demand is? Clearly in India and China, but also in Turkey. And that's why we see, and we also anticipate, that growing demand happening in this country. And so that's the reason we're here today.
Ipek Cem: One of the interesting aspects... I think this is done in the UK and maybe elsewhere, is the flexible working aspect of BT which I found very interesting, and which... seems to increase loyalty to the company, and maybe make employees more satisfied. Can you talk a little bit about that and how that works?
Olivier Campenon: Well, it's in fact, it's two-fold. First of all, let's make sure we use the tools that we are selling to our customers. And one of them are the ability to actually work remotely from wherever you are. All you need to have is a PC and a telephone plug, and a broadband access. Once you are there then you can actually have your office at home, and become a home office worker. That's what we've done, and that's what we offer to most of our employees throughout the world, especially in UK. The second thing is we moving into real time, open environment for customers. Customers are more and more demanding. They want the service now. And they want to make sure that what ever service you provide them, it's open and interfaces with all the other equipment and services they have. So we thought that the key message was to ensure that we have a nice view of the experience of each of our individual employee, and be able to allocate them on any customer project at any point in time. And that way, we become a very flexible staff that can be allocated to any customer projects anywhere in the world. Imagine that tomorrow we signed an important project in Turkey. The key will be this: we will need to have local people who speak the language, understand the environment, understand the culture. That's the reason we built, under the leadership of Tayfun Uğur our country manager, we built a team here. But we also want to make sure this built... this team will be backed up the right expertise that we've acquired with other companies, and other customers, like in health. And so we will bring those practices. We will bring that expertise on place, if needed, to help the project team to work. And once a project is delivered, then we go back home.
Ipek Cem: Now you recently mentioned, just now, about the fusion phones.(yes) Will this look and feel different than the ones we are used to right now, even though phones are always changing?
Olivier Campenon: You're right. Phones keep changing. Of course it's more marketing, than technology, but it... no... it looks and feels exactly the same. It... If you would look at the... the phone that we are selling, it's exactly the same. Inside it's slightly different, but you wouldn't know. That's the beauty of our business, it's, again, a question of making the customer experience unique, making the customer experience end-to-end, but taking the complexity to us, and bringing simplicity.
Ipek Cem: How do you coordinate, for example, an innovation that you, might be working on, with the phone vendors in terms of them capturing what can be done with the phone?
Olivier Campenon: Let me first give you an example. In the telecommunication world today, we are always referring to IP. And IP is standing for Internet Protocol. In fact, BT has been developing in its laboratories, along with CISCO, the protocol that is now being widely used throughout the world. That is a good example where it's not just us. It's not just CISCO. It's us together. That we actually managed to decide what was the best. The second example is this very large project 21 Century Network that we initiated back in 2004, and is going to last for 8 years. This project was not just initiated by BT on the side. . we decided to involve all of the largest, and also medium sized equipment vendors... we invited them. 700 of them were at the first meeting. And we presented what we wanted to do. But we also said, "You need to help us. You need to tell us if we are going in the right direction. You need to give us some perspective of what you think could happen". And once we selected all of these vendors, we really worked hand-in-hand on the development. That's what this business is about. You can't do it in your garage, by yourself. It is connected world, and it is also an open world. So you need to make sure everything you do is open. Proprietary and monopoly are dead.
Ipek Cem: And I was just going to come to Voice-Over IP. And this is really taking off. How is it competing with fixed lines?
Olivier Campenon: A lot. A lot. And BT's made, about 3 years ago, made a choice of taking the risk of cannibalising our own revenue stream. And it's always a very difficult choice, as you may imagine, especially for a CEO. But we made a choice, and we believe that we made it rightly, at the right time. Because if we hadn't, our competitor would have done it for themselves. So in fact what does it mean? We decided to invest into the broadband services. We decided to invest on this IP platform, and now we are in a position to propose to our customers IP telephony, immediately. On their network. And while we are going to see a reduction on the revenue stream... that's why in our results you may see our traditional revenues going down. We've created a set of new services. This so-called "new wave" services. They are over-compensating the decrease of traditional revenues. And hopefully we did it in time. So now we can show growth.
Ipek Cem: When we talk about telecommunications, we are talking also about regulation. And now we have a united Europe. We have a lot of combination of countries deciding to do things a certain way. Is there a lot of redundancy between the kind of work companies, or countries are doing? Is there enough cooperation or joint strategising at the Government and... levels such as the EU?
Olivier Campenon: I... would not surprise you if I would tell you that there is always a tendency of many of the Government to somehow protect their companies, and their main telecom operators in their country. BT is pushing for, strongly pushing for an open playing field... in other words, we expect all of those inside Europe, but also adults, will present the same rules, the same regulation so that it is a fair competition. We do accept that from a country to another, that this regulation may not arrive at the same pace, because. As you said, in Turkey the privatisation is still recent. So it's normal to take some more time for. Turk Telekom to really settle in this new environment, but of a time we are expecting the full competition in Turkey. I think that's the only way to have a real benefit for the end customers. So that's what we are pushing for. That's why we are helping all of the regulators on understanding the effect on any of their decisions. That's why we are spending a lot of time in Brussels, and with the EU, to also help them to understand it. But more importantly, for a country like Turkey, it is important to realise that this is a worldwide competition. When a large group will decide to implement new presence in the world, they will of course check the environment, the economic environment, and the market demand, but they also will check on the tools that are available in the country. Telecommunications being one of them. If it's difficult to communicate within, and to that country, it's likely that they will think twice before further investment.
Ipek Cem: How would you rate Turkey on that respect?
Olivier Campenon: Well, it's... very good progress over the past, over the past two years, and we now waiting for, if you wish, the next step. We've... the structure... the regulation structure has been set. Now it's a question of applying it fully, so that we can really see an open competition.
Ipek Cem: Some people have health concerns, especially over mobile phones, and maybe even some networks. What kind of research is going in to that, or awareness is there at BT to provide more accurate information about health concerns relating to communications?
Olivier Campenon: Well, there's been a number of studies, being done, and I think BT is extremely careful and investing a lot of money to make sure that information is available to all of our customers. In a broader way, BT is very keen on corporate-social responsibility. We believe that as key players in this global environment we need to show the way, and we actually are pretty proud of having been awarded for the 6th year by the Dow Jones sustainability index. And... but it's just a demonstration that we care. We do care. We do care in the way we consuming, we taking care of the energy. we do care in the way we manage our wastes, but we also do care for the people and the countries we live in. Recently I was in South Africa, and we've launched a special programme with UNICEF to help some schools, just to get access to the telecommunications world, and make sure that the the students understand the power of communications. And that is just one of many examples of our responsibility.
Ipek Cem: Well, on that note, I'd like to thank you for your time.
Olivier Campenon: Thank you. Thank you very much. Goodbye.
This transcript was typed from a transcription unit recording and not copied from an original script. Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, NTV networks and Ipek Cem cannot vouch for its accuracy.