Belfast Telegraph

Thursday 17 April 2014

New BT boss braced for more ‘challenging’ times

BT’s new chief executive for Northern Ireland, as well as the Republic, takes over the reins at a time of intense competition in the communications market.

Scotsman Graham Sutherland took over the top job from Chris Clark, who left for BT Enterprises in London, a little over three weeks ago.

Since then the company has reported annual results showing a decline in revenues, and faced the threat of its first strike by staff in 25 years.

Amid strong competition in its retail, business, and broadband markets, local revenues were down 3% to £801m, though profits rose 12%.

An accountant by training, Mr Sutherland believes that in a very challenging market this was a strong outcome.

“Our revenues are down 3%, which is a reasonable performance when you consider that in our sector, some of the mobile guys in the south and Eircom have all been experiencing 6%-10% decline. There has been a significant amount of value taken out of the market through the recession and increased competition, so we’re pretty pleased with the topline,” he said.

“I think the revenue position is solid. I think the next 12 months will be just as challenging. I’m not expecting a massive fluctuation in terms of the market — I think in the south another 10% of value will come out, and in the north there will be much more aggressive competition.”

Aptly for a man named Sutherland, the new BT chief hails originally from Inverness, though he retains only a hint of his Highland accent having worked extensively in Northern Ireland, the Republic, and the US.

His previous experience leaves him well placed to understand both the changing communications market, and the idiosyncrasies of the Northern Ireland business environment.

Prior to joining BT Ireland as chief financial officer in 2006, he headed up NTL Communications in the Republic, and has also held roles as managing director of Maydown Precision Engineering and Bombardier’s Business Jet Solutions business in Texas.

“I’m delighted to get the chance to lead this business. It is a complex business with tremendous capabilities in a wide range of market segments. I have been really impressed — given how difficult the environment is — with the people and what they are trying to achieve for the company. When you see that positivity, it helps to clarify what you do as a leader,” he said.

The positivity of employees has come into question recently in a dispute with the Communication Workers’ Union (CWU) over pay.

BT has offered employees a 2% pay rise, but the CWU argues this is below inflation and wants a 5% rise.

“We don’t want a strike, we think we’ve made a fair offer,” said Mr Sutherland, echoing sentiments from BT’s top management in London.

If it did happen he said there would be a “strong focus” on ensuring services did not suffer.

Where other parts of the organisation have made staff cuts, he notes the regional operation has managed to keep its keep its costs down through natural wastage and voluntary leavers.

“We haven’t had, and don’t do, compulsory redundancies,” said Mr Sutherland.

“We haven’t had any kind of kneejerk reaction to the difficult trading environment as result of the recession. We have kept to the same controlled agenda running three or four quite aggressive cost transformation programmes.”

He cites the 800 jobs at BT locally that serve rest of BT organisation, including one of the firm’s seven global development centres, as a sign of commitment to Northern Ireland.

“There’s global competition for those type of jobs, and I think it’s great that we can have them in Northern Ireland. They wouldn’t have come here if those skills were not available.”

The UK’s biggest fixed-line telecoms provider said at the time of its results that it was in a position to increase investments in high-speed fibre and IPTV, and would spend an extra £1bn to extend its fibre rollout to two-thirds of Britain.

The firm is also partnering with the Department of Enterprise, Trade and Investment (DETI) on a next generation broadband project that is aiming to bring faster broadband speeds to 85% of businesses in rural and urban locations in the region by 2011,

The roll out of of the super-fast broadband network — miles of fibre optic wires linked to exchanges that will increase download and upload speeds — is around 20% complete.

“It is on track. We’ve rolled out close to 150 cabinets already since January, so we are really moving at pace with this,” said Sutherland.

“There’s another 12 months to run and we’re going to be flat out, with a lot of people working long ours to make this happen. It is a positive development, and we are increasing investment at a time when other companies are not,” said Mr Sutherland.

As well as future-proofing its own network, he believes the upgrade will have positive impact on the economy — giving Northern Ireland a better quality network than exists in many other European countries, and creating more opportunities for working from home.

The BT man is also sanguine about the impact Project Kelvin, a new network linked to the US and being rolled out by Hibernia Atlantic, will have on BT’s business.

“We will compete with it in certain situations, and we may use it in certain situations,” he said.

“Any additional competition is a good thing. We are comfortable that we have one of the highest, if not the highest, quality networks in Europe. The fiber penetration here is exceptional, and we have connections through BT to 170 countries around the world.

“It is more network capacity in Northern Ireland and might bring value to consumers in some areas, but I wouldn’t underestimate the value of what already exists.”