BT aims for respect with MPLS expansion

As British Telecommunications plc introduced a Toronto node on its global MPLS network and a new private-line service meant to connect corporate Canada with 20 other countries, one of the company’s executives said BT is aiming to regain respect among Canadian enterprises.

The firm said the additions are part of its plan to extend IP infrastructure in the Americas, a promise it made last year.

But according to Chuck Pol, New York-based president and chief operating officer of BT Americas, the new offerings also speak to the firm’s effort to win back some of the respect it had before experiencing financial woes a few years ago.

Pol, visiting Toronto for a meeting with BT clients, said the company faced a massive debt load in 2000. It had to sell off some of its assets to corral that US$45 billion burden, the result of BT’s paying for wireless 3G licences and other factors.

Robert Brace, the company’s chief financial officer, stepped down. BT dissolved its money-losing global access venture with AT&T Corp., Concert Communications Co.

Despite certain troubles, however, Pol said BT maintained its US$500 million annual spend on R&D. In 2001 the firm opened a research lab at the Massachusetts Institute of Technology (MIT).

As for the debt, “we’re in a position now where it’s about US$9 billion,” Pol said.

He said some potential BT clients might be “a little skeptical” of the firm’s commitment to providing global service, given its former financial problems.

That’s part of the reason for Pol’s visit. He came to Toronto to explain the company’s vision, and outline services that multinational corporations with facilities in this country might find useful.

Pol said BT has three main connectivity products: basic IP connections; business applications like video conferencing and media streaming; and “integration and transformation” services such as managed telecom offerings.

The firm counts Unilever plc among its clients. This household and personal care products manufacturer has a global, multiyear contract wherein BT manages the global communication infrastructure.

Pol said BT works under a global account manager model: a client would deal with a single rep, no matter where in the world the customer has offices.

Regarding the Toronto node, “it’s not a build-it-and-they-will-come scenario,” Pol said, pointing out that BT only built the point of presence after one of its clients requested it.

According to industry analysts, BT need not worry about its reputation. The company may well have faced a nasty financial situation, but it handled those circumstances well, telling investors and customers up front that all was not right with the bottom line.

Compared with other global carriers, “BT has been the best performing of all…for bringing down the debt,” said Brownlee Thomas, an analyst at Forrester Research Inc. in Montreal.

“They basically retreated to Europe post-Concert, but that was brief.”

Elroy Jopling, a Toronto-based analyst at Gartner Inc., said BT and AT&T “retrenched somewhat” after Concert split. “They’re both back,” he said, adding that these companies compete for global enterprise clients today, although BT tends to court British-based multinationals while AT&T chases U.S.-based firms.

That could change, according to Thomas. She said both AT&T and BT seek Europe-based multinationals. That’s why the companies meet each other “at every RFP” in Europe.

Pol said BT and AT&T continue to purchase wholesale access from each other. It’s not as if the carriers are at each other’s throats.

Nonetheless, as BT ramps up its offerings in this country, the telco is watching its back. “You have to take the competition seriously,” Pol said.

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