with Bas Burger, President, US & Canada, BT Global Services
Solving complex communications problems for large multinational corporations is a challenge that Bas Burger, president, US & Canada, BT Global Services (NYSE: BT), knows how to tackle. Before taking the helm of North American operations, Burger was president of the Global Commerce vertical market unit and Europe, Middle East and Africa and Latin America, where he was responsible for BT's business customers in these regions. Sean Buckley, senior editor of FierceTelecom, speaks with Burger about BT Global's role in providing services to multinational corporations, what differentiates it from other players, and key issues.
FierceTelecom: You were appointed as the new President of BT Global Americas earlier this year. Talk about your initial days on the job and what you have learned thus far.
Bas Burger: I have actually been on the job for six months so the first 90 days have come and gone. Before this I was responsible for Middle East, Africa and Latin America and I ran global commerce. I still run the global vertical, but my geographic focus over the past six months has switched to the U.S. and Canada. For me, the only switch we have seen is the geography. For us, the U.S. is an extremely important market because we have invested in many areas of the world and many particular capabilities with the sole purpose of supporting multinational clients around the globe with their communications needs. Many of the clients that we're focused on are headquartered out of the U.S. In Western Europe, we're the challenger. In some of these countries we have an extended access network. In the U.S. we are a challenger. There's a lot to gain and there are a lot of moving parts that are very strong. My last six months has been spent focusing our attention and investments on making sure that we are addressing these opportunities.
FierceTelecom: How does BT's position in the U.S. and Canada differ from EMEA and Latin America?
Burger: From a BT perspective, the big difference is our market position. Historically, in the UK we're strong as we are the incumbent. In Western Europe countries, BT has been active for a long time in access networks. For example, we have our own access networks in Italy, The Netherlands, Spain, and Germany. Our position in those countries is a challenger position so we have more to defend and less to gain.
From a BT perspective that's the difference between the North American and European market. If you look at it from an external perspective, the Western world in general over the last many years, even before the 2008 decline, has been a downward economic trend whereas Asia and South America and Africa have been on an upward trend. In that dynamic, if you compare Europe to North America, the North America region is a bit more resilient to these types of developments.
U.S.-based companies were the first ones to invest again compared to their European counterparts that are also our major clients. Most of the investments are going into growth regions. Companies are looking where to grow. If it's not in North America, they will go outside of the outside. You see more and more U.S. companies looking for growth outside of the U.S. and Canada. That's good for us because we can help them grow in these regions and set up shop flexibly and securely.
FierceTelecom: You mentioned you have a long way to go here in the U.S. What are some of the key initiatives you are spearheading?
Burger: I don't think you should expect something huge to happen. We are very much focused on the things that we do well. What customers can expect from us is that we will increase the resiliency, availability, and flexibility of the portfolio we serve our customers with. That is basically in three areas. One is our global network, which we are building out and building new technologies. Networks need to be up all of the time and applications need to be predictably up all of the time and if not we need to be able to predict and proactively manage capacity and performance of the networks. That requires a lot of technology and is something we're doing on a global scale.
Secondly, we are investing in professional services. Basically, these are people that advise our customers on what new technology will be useful for them to use collaboration tools. How can they use collaboration in the business and in the office, but then securely and according to the corporate standards? How will bring your own device work from a company's perspective? We have professional services around security.
Another thing our clients want is to go one step beyond technology and help them with specific vertical applications that allow them to do their business better and to differentiate. We're specifically organized in vertical units. In my case, I am responsible for pharmaceutical companies, chemical companies, consumer packaged goods and the like. They have very specific needs.
In the pharmaceutical sector, the way they use technology to do clinical trials is something with our global network and our compute capability we can help our customers. We have built a product called BT for Life Sciences R&D, which will allow pharmaceutical companies to work with their favorite applications on the cloud and a wide array of databases to do their clinical trials and development work. Now they can use the network for a day or a year and only pay for what they use. It is the same type of network we use for other technologies, but we have tailored it for the life sciences community. You can expect us to invest in those areas. We will invest in the platform, the security of the platform, but we will not start building pharmaceutical applications.
FierceTelecom: Another hot issue is AT&T's (NYSE: T) proposal to end extended contracts for special access TDM services. How does that affect BT and its customers?
Burger: For us it's important for customers that there is a competitive landscape. It is important for us because it will allow us to deliver services across our own network and manage it end to end. It will make it easier to service networks and deliver the services in places where our customers need it in a cost effective manner.
If you don't have it, there's a tendency to buy it from different companies, which will make it difficult to stitch it all together not only for us, but also for other companies wanting to go into the U.S. to provide a service across access networks.
For our customers, it means prices are higher than other markets where they are regulated. It is providing a good margin to the companies that are dominant in this space. You could argue wherever they invest it needs to be a benefit to the U.S. because it is U.S. companies paying for higher access prices. For us it will create competition and a good climate to go into the U.S., whether it's a manufacturing plant or a services industry.
It's a complex issue and I don't think we're going to solve it in the short term, but it needs to be solved. There might be a trend in technology that eventually all buildings get dual access from one or more providers which could create competition, but that's a long way away, particularly outside of the big cities in the U.S.
FierceTelecom: What do you think is BT Global's differentiator?
Burger: We have a global network and a global presence in 170 countries. We do have a lot of experience in professional services and a lot of IT capabilities like security across these networks. We have just been at it for longer than many others, so we have learned our lessons because BT had to.
In 2000, BT split wireline and wireless because of the crisis around 3G licenses in Europe. BT decided to sell wireless from wireline. From that moment in time, BT was forced to grow its business for wireline as well as in the value chain. We had to grow by providing professional services and grow by providing IT services on top of the network so that we could grow our top line and utilization of our assets globally.
Today, we don't have a wireless business, which is an advantage because we are technology agnostic when we do mobility plays. We are technology agnostic when we do performance management tools. We know what goes across our network. We also have an installed base of multinationals that are asking us difficult questions. In these questions we determine what is the next big demand. That is what we do differently than other companies.