Peter Evans from BT reflects on his years working in Ireland’s telecoms market and how the business and relationships have changed.
Peter Evans, currently director of wholesale pre-sales and strategy for BT Ireland, has worked for BT (formerly Esat) for more than 20 years.
Today, his role makes him responsible for BT’s wholesale business in Ireland, which provides services to more than 50 service providers in the Irish market, including Sky, Three, Vodafone and Virgin Media. He also has responsibility for BT Ireland’s pre-sales activities within its networking, ICT and security businesses.
He spoke with Siliconrepublic.com about BT’s decision to focus on wholesale in Ireland and the changing landscape of the telecoms market nationwide over the past two decades.
Tell us about BT’s decision to leave the consumer market and become a wholesale provider in Ireland.
In 2009, we made a decision to exit the consumer and small business market. It was a really difficult market for us to compete in. A lot of the strong regulation wasn’t in play and the BT brand wasn’t well known in Ireland. It was expensive for us to try and establish a brand – you’re talking about TV advertising, newspaper advertising, radio etc.
The break-even point was about 100,000 customers at the time and we struggled to get above that number. We had between 80,000 and 100,000 consumer and small business customers, though it fluctuated on a yearly basis.
Once you hit the break-even point, the competitive environment got really strong and you were knocked back. Eir would react with a really competitive proposition at the retail level. And Virgin Media would react. We could never really get to that critical mass.
To this day, it’s probably one of the best decisions we’ve made as a business. It did two things: it took away a loss-making part of our business, and it also gave us a long-term wholesale contract. In exchange for moving that retail base to Vodafone, we signed a seven-year wholesale contract that is still in place today, 10 years later.
While you may have given Vodafone the customer base, you still ran the systems. Is that right?
We ran the network and the services behind that. We handed over the retail aspects: the marketing, the billing, the customer service – the stuff that we struggled with and that Vodafone is really good at. That created a really good wholesale base for us within the market here.
So, what does the BT business in Ireland look like now?
Our revenues in Ireland are around €350m per annum and 40pc of that is wholesale, the rest is B2B. It all runs on our domestic network and our domestic systems here.
For a retailer such as Sky, Pure Telecom or Three, they have options around what wholesalers they buy from but, in most cases, they have to buy from all of them. They have to integrate all of them, do contracts with them all and systems integration etc. We sit in the middle and we provide that aggregation for all those access networks. That’s our unique selling point within the marketplace.
Our retailer doesn’t need to worry about signing up with multiple wholesale access providers. They can sign up once with us, we provide all the services, all the backhaul and all the contractual agreements with those access providers, and the value-add services on top of that, such as security, VoIP, internet access etc.
We can provide all the different products from Siro, from Eir and deliver them as a package into retailers. That’s what we’ve been doing for a number of years. We’re competing with Enet, Siro and Eir in certain scenarios but we’ve built up a base ourselves that we’re now at scale in the wholesale market.
How does that environment of competition and partnership work?
Siro for example, from our point of view, is an access network. They deliver end-user services from the consumer’s house or businesses back to the local exchange or to the nearest point. We don’t do that.
We don’t invest in the local loop here, in the end connection. We effectively buy that off other operators. So, they’re a supplier and a partner to us and to our wholesale business.
The market is very competitive. When you talk about Siro, Eir, Enet etc, we’re all partnering to some extent, we’re all competing to some extent, and we’re all customers of each other to some extent. That varies depending on where you sit within the value chain to the customer.
In terms of FTTH, how do you do it as a single wholesale operator?
We have wholesale relationships with Eir, Siro and Enet, and we will have a wholesale relationship with the National Broadband Plan – if and when it becomes a company. They’re experts and they provide the fibre – the last-mile fibre connectivity – to the customer. We interconnect with all of those providers as close as possible to the customer.
Take a town like Carlow, for example, where Siro, Eir and Enet have fibre around the town. We have interconnect points there where we plug into their local access fibre and that gives us a physical connection into the customer. The rest is all delivered on our network.
We have a network which runs across the CIÉ rail network in Ireland. We have the next layer in ethernet and IP services, IP addressing, security – all of the higher-level services, we provide all of those. We package them up and deliver them to the retailer, so the retailer doesn’t need to do any of that.
This way, these access providers can concentrate on what they’re good at. Three is a good telephony, mobile and broadband company, and they sell that. Do they want to be involved in the IP addressing, the low-level security and the digging of the fibre connections? No. They leave that to us.
How do you manage service set-up across all these providers?
The IT platform that this all runs on is fully automated. When a Sky customer goes on their website and they press the button to buy a service, that order flows into our systems. Our systems will create the service instance, will create the IP address, will create the VoIP service. If it needs a connection from Eir or from Siro, it’ll automatically do that through our systems into their automated systems. The only physical piece of work will be the delivery of the modem, by the postman to the end customer.
It has to be like that because we’re talking thousands and thousands of requests a day. Upgrades, cancellations, orders, service faults, outages. There’s loads of different requests, and all of that flow-through has to be automated.
10 years ago, it would have been difficult to envision this level of collaboration now taking place. How have these relationships evolved?
The relationship has matured over the years. There certainly were a lot of disputes and disagreements back in the day. We still have our challenges. We still have our disputes with Eir and we still talk to ComReg, but it’s much more collaborative now. We will work together to try find a resolution.
We actually find that, as a business, the markets that we are very strong in, such as the international market, we’re not falling over each other as much as we may have done in the past. We’re not in the consumer market, we’re not in the SME market, we’re not in the mobile market – they are. At a retail level, we don’t really cross paths as much as we used to.
It is still highly competitive, though. Where we compete in markets, we compete really aggressively. The mobile guys do, too. If you look at the average revenue per user on mobile, it continues to fall every quarter that ComReg puts the report out. That’s because of intense competition in the market.
Broadband prices are falling, so the retail and wholesale competition is very severe.
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