BT launches biggest TV campaign for two decades

BT has launched its biggest TV advertising campaign for 20 years’ in the hope it can link-up all the network and brand assets in pursuit of the convergence business.

The new campaign, running across all available channels, will hopefully build the foundations to reinvigorate an ageing BT brand and push towards creating a new business model, heavily relying on the new ‘Halo’ convergence product.

More than three and a half years after acquiring the EE business, BT is getting down to the difficult work of making sense of the business. The expensive and questionably beneficial venture into TV proved to be a useful distraction for the team, though now it seems it is making progress on validating the £12.5 billion deal which brought the mobile giant into the group.

“Today’s launch of the ‘Beyond Limits’ campaign represents a real shift for BT, inside and out,” said Marc Allera, CEO of BT’s Consumer division.

“Our presence and scale across the UK means that we have an opportunity and responsibility to go further than ever to connect more people and businesses across the UK, help them make the most out of the technology they have, and equip them with the skills they need to shape the future. This campaign represents just that, a bold step into the future, helping people to break down barriers and realise their potential.”

The TV ad follows the story of a young girl as she travels through modern Britain to reach her classroom of the future. This aspect of the campaign draws attention to the innovations which are made capable as future-proofed networks, both 5G and full-fibre, are rolled out through the country.

While this aspect of the campaign does not pay too much homage to the wider scale of the BT business, it does draw attention to the digital skills and education campaign which the team has launched.

Alongside this TV campaign, BT will also brand all of its EE shops with the BT branding and will sponsor all four football unions representing the members of the UK. The BT business does need a brand refresh, it needs to be presented as a modern company in the same way Three and O2 has done in recent years, though we will be curious to see how these campaigns aim to marry the different assets in the mind of the consumer.

If you look at the assets which the UK telcos have at their disposal, BT should theoretically be untouchable. The largest mobile and fixed networks, a wifi footprints with five million access points and a new TV proposition, behind schedule currently but should be launched in the New Year.

The new BT brand is a good start, offering the company a fresh start, but soon enough someone will have to make the brave decision to retire the EE brand, as well as the expensive brand marketing campaign fronted by the likes of Kevin Bacon and Britney Spears. Not only is running two advertising campaigns very expensive, the perseverance of a multi-brand strategy does not help the push towards convergence.

Hopefully this is the first step in this journey forward. A significant brand marketing campaign will refresh the brand and drive towards repositioning the BT business. The TV ad does encourage the association with BT and future-tech and does provide the foundation to build bigger and better things. However, the team will still have to tackle the complicated job of marrying all the connectivity and entertainment assets into a single, bundled proposition.

BT insists the future is more than just 5G

It might be dominating the headlines, demanding the lion’s share of CAPEX and a fresh opportunity to show some sort of innovation, but BT has reiterated the message that the future is more than just 5G.

Speaking at Broadband World Forum in Amsterdam, BT’s enterprise business CEO Gerry McQuade offered the room a timely reminder that there is a lot more to creating a future-proofed telco than rolling out an expensive and flashy 5G network.

“5G vision, whilst it is not the catalyst of the strategy, it is absolutely key in delivering it,” McQuade said his presentation.

The GSMA is suggesting telcos will spend more than $244 billion on 5G networks by the end of next year. While this is of course spread out across the operators globally, it is still a monstrous figure to generate ROI against when you consider the gloomy picture which is looming large across the consumer segments.

5G is unlikely to be a silver bullet to solve all the challenges which telcos are facing, and it probably won’t be the only reason the industry wins out against the OTTs who are causing chaos, but it is unavoidable. Telcos cannot exist in the world of tomorrow without 5G.

“5G vision, whilst it is not the catalyst of the strategy, it is absolutely key in delivering it,” McQuade said.

Aside from 5G network deployment, BT also has to consider fibering up the nation, reskilling itself internally, developing ecosystems around new solutions, fine-tuning the TV proposition which is set to launch next year and implement a software-orientated, agile and data-driven mindset in all business units.

The telco of today has a lot of transformation work to undertake to ready itself for the challenges of tomorrow. These are just a few of the elements to consider, though 5G is certainly a meaningful element of this patchwork of complexity. However, there is a lot more to the digital era than gigabit speed over the air.

BT Mobile joins the 5G fray

BT has become the latest mobile player to enter the race for 5G subscriptions, though it does beg the question how economically attractive it is to own two rival services.

Launching in 20 cities and towns around the country, BT Plus and BT Business customers will be the first to be offered upgrades to the service. Convergence is a key pillar of the BT turnaround strategy, and the introduction of 5G to the BT brand does build in more relevance moving forward.

“Our 5G service provides customers with a faster and more reliable connection in high demand, crowded areas across the UK at peak times,” said BT Consumer CEO Marc Allera.

“When combined with the best fibre, the UK’s fastest 4G network and biggest wi-fi network, BT is helping consumers and businesses stay connected wherever they are and whatever they need to do.”

Despite the fact BT is in the most powerful position in the UK when it comes to connectivity assets, it hasn’t really been able to cash-in on the convergence craze just yet. The issue which has not been addressed to date, and now we suspect it won’t be in the near future, is rival brands, fighting for the same consumer, to contribute profits to the same bank account.

Customer acquisition in a mature and saturated market is incredibly expensive. The most successful strategies are generally those geared towards price, though this does create the dreaded ‘race to the bottom’. Perhaps one of the reasons convergence has not hit the high notes at BT is the multi-brand strategy which the team is persisting with.

EE has an excellent mobile brand, but it found wanting in broadband. BT leads the market in broadband but lacks clout in mobile. If either of these brands want to create value through convergence, they will have to lure customers onto a secondary-service which does not have the reputation of rivals. This is an expensive means of customer acquisition, both in terms of advertising and lower ARPUs.

These brands are not only fighting to lure the same customers away from the same rivals, they are also attempting to steal subscriptions from each other. It doesn’t seem like the most logical plan.

At some point, the brands will have to merge into one. Convergence doesn’t make the most sense when you trying to sell two different brands in the same bundle. We suspect the BT brand will win out, especially when you see the expensive brand advertising campaign which has been launched with the England, Wales, Scotland and Northern Ireland football associations.

That said, it is important for the BT brand to enter the 5G fight if it does want to remain relevant in the mobile world moving forward.

Looking at the deal, BT consumer customers can choose from 6 GB, 30 GB, or 60 GB 5G mobile plans, and can also gain a £10 monthly discount if the plan is purchased alongside a broadband package. This might gain some traction, though there is still plenty of opportunity for pricing strategies to shift over the coming months.

Although many of those with 5G ambitions have unveiled their pricing strategies, there is still plenty of volatility left to realise. Pricing seems to expensive right now, though the telcos will be stubborn while the early adopters are purchasing. These are consumer who are less likely to be deterred by price. As soon as the mass market starts to get interested, this is where we can envision the pricing war genuinely kicking off.

BT starts making noise about convergence with Halo launch

Convergence is a proven business model and now the slumbering giant of the UK telco market is starting to head in the right direction.

While there is already a convergence product available to customers, to date there has been questionable success. Unlike continental Europe, convergence has not really gathered steam in the UK, though BT is attempting to shift the status quo.

“I feel this is a once in a lifetime shift for BT in the UK,” CEO Philip Jansen said. “BT Plus has been a huge success, but this is a modest, first convergence product.”

The new convergence product will be known as Halo, available to both consumer and enterprise customers. The product will include the fastest available broadband service, unlimited mobile data, with the option to upgrade to 5G, a team of customer service agents which do home visits and access to the wifi presence throughout the country. Prices have not been announced just yet.

While this is a promising move forward, there are still challenges which need to be addressed.

Firstly, does the UK consumer understand the concept or benefits of convergence. And secondly, can a convergence product be successful when you have two distinct brands?

Starting with the concept of convergence, perhaps there is a misunderstanding about the definition and benefits because the telcos have not made enough, or the right, noises about it. Up until recently, BT was the only UK telco which had the assets to create a genuine convergent product portfolio. There was of course a significant advertising campaign behind BT Plus, the first iteration of convergence, though arguably this had limited success.

Before too long, more details will be unveiled regarding a brand advertising campaign. BT will have to be smart to communicate the benefits very clearly.

Looking at the BT business, this is where the team has a big decision to make; can convergence work when you do not have a single brand? EE is king of mobile, but questionable on broadband, while BT is the broadband leader with a suspect mobile offering. More has to be done to marry the two brands together.

An interesting announcement which has been made which will help to address this challenge concerns the high-street. The BT branding and customer service team will have a much more prominent presence in every high-street store moving forward. This will help tie the two brands together in the minds of the consumer, though you still have to question whether convergence can be successful with two distinct brands.

Ultimately, this is a good move forward by BT. There is still a sense more could be done and said, though it is heading in the right direction.

BT has an opportunity few others in the UK can compete with. It has the widest and best-performing mobile network, a dominant broadband network and a wifi presence with more than five million points of presence. Over the next couple of months, the TV service will be re-launched adding another element to the mix.

Should the team be able to create a product which is attractively priced, supported by a brand marketing campaign which clearly communicates the benefits, BT should be untouchable in the UK’s connectivity segment.

Openreach unveils rural fibre trials

Openreach has provided some colour to the rural fibre plans, testing out new technologies and techniques, with the objective of connecting 50,000 homes by Christmas.

13 rural locations around the country have been selected to trial the new technologies and techniques. Should the pilots prove successful, the hope is full fibre deployments can be accelerated, allowing the team to meet the demands of ambitious (and potentially misguided) politicians.

“At Openreach, we’ll never just be a city fibre provider,” said CEO Clive Selley. “We’ve always worked hard to improve connections to isolated, less commercially attractive communities through inventive engineering and effective funding partnership models.

“In recent years, we’ve been extending our full fibre network into rural areas – mostly in partnership with local authorities and Government – but the economics are clearly challenging, and we want to do more.

“The trials will also give us a much clearer picture of what the technical challenges in these kinds of rural areas are. We hope they’ll go a long way towards developing the tools, skills and innovations required to make sure that nobody’s left behind in the full fibre future.”

The 13 trial locations across the UK will see Openreach test out some new equipment and techniques which it seemingly hopes will improve the commercial business case for full fibre deployment in the rural regions. Let’s not forget, while the Government clearly thinks Openreach should forget about profits in pursuit of a nationwide digital society, it is a private business with responsibilities to shareholders.

One new piece of equipment which the team will be testing is a new trench digging tool known as a ‘Diamond Cutter’. With diamonds embedded in the blades, the tool can carve through concrete much more efficiently, while simultaneously laying the tubing for fibre cables. Openreach suggests the tool could lay 700 metres of cable a day, 20 times greater than a traditional two-man team.

Another trial will focus on ‘remote nodes’. The broadband boosting equipment enables current fibre installations to be extended by 150%, allowing the team to ‘piggy back’ on existing assets. The hope is with this trial that the team will be able to avoid the expensive and time-consuming job of deploying new fibre spines to the rural locations.

What is worth noting is that while any business will look to innovation to decrease financial outlays, there is political and regulatory pressure in the background also driving the Openreach ambitions.

Announced back in June, Prime Minister Boris Johnson made the very grand proclamation that his administration would fuel a full fibre diet, reaching every household by 2025. Considering the previous objective was to fibre-up the country by 2033, the accelerated timeframe would certainly get a few people in the industry panicking.

Speaking to Telecoms.com, a few industry insiders suggested Johnson was not necessarily living in the real world with such ambitions. Not only would the financial burden of these of these plans perhaps be inhibitive, but the regulatory environment isn’t the most helpful, while the workforce would need to be super-charged. BT has since suggested the industry would have to find additional investments of £30 billion to meet the earlier deadline.

If the likes of Openreach are going to aid the Government in reaching such ambitious targets, the success of these trials will be very important. That, and finding the extra couple of billion needed to finance the projects.

Openreach maps out fibre plans for the next 18 months

BT’s fixed line wholesale division has created a new website that allows everyone to see how its fibre roll-out is going.

The website devoted to banging on about Openreach’s Fibre First programme features a map showing every bit of the US that either already has FTTP, is in the process of acquiring it, or is in Openreach’s immediate plans. 29 more places have today been added to those immediate plans, taking the total over 100.

“Full-fibre broadband provides a reliable, future-proof, consistent and dependable service that will be a platform for economic growth and prosperity throughout the UK for decades to come,” said Openreach Chief Exec Clive Selley.

“We’re now building at a massive scale. Every 28 seconds we pass a home or business with our new future-proofed full fibre network. This has given us ever greater confidence in the level and accuracy of whatever we announce – which is why we’ve now laid out our build plans right up to the target delivery date of four million premises by March 2021.

“We also want to ensure we give our stakeholders – like council leaders, planners and MPs – the best view of where and when we intend to build so we can work together to build as rapidly as possible and help encourage people to take up the technology when it arrives.”

You can see the site, with its handy map, here. One possible reason Openreach has decided to be more transparent about its plans and progress is the political elevation of fibre under the Johnson premiership. Better broadband for everyone seems to be one of his key bits of propaganda and the company will want to be seen to be entering into the spirit of it all. Openreach expects to have connected four million homes and businesses to full-fat fibre by April 2021.

BT said to plan copper broadband network switch off by 2027

A new report claims UK operator group BT is planning to complete the full conversion of its fixed line network from copper to fibre within eight years.

The gossip comes courtesy of Sky News, which reckons BT CEO Philip Jansen is in ‘secret talks’ with the government regarding the timetable for switching off the copper broadband network. What makes these talks more secret than any others between CEOs and politicians isn’t stated. And, of course, the very act of publishing the story also means they are definitely not secret now anyway.

Apparently Jansen is at the head of an entire covert cabal, including regulators and other industry stakeholders, intent on dictating the UKs broadband agenda for years to come. A kind of telecoms Illuminati, the report would have us believe. The initiative seems to have been catalysed by Prime Minister Boris Johnson’s stated aim of achieving full UK fibre coverage by 2025.

We asked BT for a comment on the report and got the following: “As we made clear at the time of our last financial results there needs to be a determined acceleration towards a pro-investment policy and regulatory regime, so BT is keen to see the industry work together with government on the big challenges – such as digital switchover and rural coverage – that we all want to see addressed.”

That seems to be a circuitous way of saying “we don’t comment on rumour and speculation,” but fair enough. Speaking to other industry figures we get the impression that Sky’s source (assuming they didn’t just make it up) probably leaked in order to put pressure on the government and regulators to create the environment to make this broadband utopia possible.

Meanwhile Greg Mesch, CEO of CityFibre, opined the following: “In light of our funded and mobilised Gigabit City programme to deploy wholesale full fibre infrastructure to at least five million homes, Ofcom’s exclusive focus on BT Openreach as the vehicle for migration from copper to fibre is wrong. Retiring the copper network needs to be managed in a way that promotes competition, benefiting every builder of fibre networks, rather than simply reinforcing BT Openreach’s existing market dominance. Consumers should have the power to switch to any full fibre network. CityFibre stands ready to play its part in transferring the nation’s homes and businesses onto a new generation of fibre networks.”

BT has consistently stated that it will only hit these kinds of targets if the right regulatory, public investment and industry cooperation environment is created. By contributing to a public expectation of full fibre by 2027, maybe BT hopes to put the ball in the government and Ofcom’s court. BT can then say it’s doing everything it can to make this happen, but is hamstrung by an unhelpful public sector.

EE forced to backtrack on 5G data tariffs

It does appear EE has been forced into a rethink on 5G data pricing, as the firm launches an unlimited data offering to keep pace with rivals in the UK.

Like hamburgers at breakfast, the 5G tariffs didn’t look right to start with. The price points were too expensive for today’s cash conscious consumer who expects the world for tuppence. EE might have been first out of the gate to capitalise on the growing 5G euphoria and earn the right to boast about being first, but it has been forced to backtrack a little.

The only issue with being first is that you give everyone else a taste of what is on the table. Even if EE had nailed the proposition and priced it perfectly, it left the door open to be embarrassed by rivals to be undercut. If the aim of the game was to secure post-paid subs and look to long-term ROI, EE left itself exposed to a cheap shot.

That said, it has now seemingly rectified the situation.

When it first launched in May, prices were tiered depending on download limits. Not only did it not look practical, limits would be reached relatively easily, it was expensive. Admittedly the price of 5G devices were factored in, but with rivals presenting options which were easier on the wallet, a new approach was needed.

“If you want an unlimited data plan, you should get it on the UK’s best network, with the coverage and speeds that let you make the most of it,” said Edward Goff, Marketing Director at EE.

“Our new unlimited range offers customers the ultimate smartphone experience in more places across the UK than any other network, all with no speed caps and great swappable benefits like Amazon Prime Video and BT Sport.”

What is worth noting is that the unlimited offer for 5G-SIM only plans is still expensive.

MNO Price
EE £44 a month
Vodafone £30 a month
Three £22 a month
O2 Unknown

Each of the telcos have taken their own approach to data pricing. EE offers 5G SIM-only contracts for £44 a month in the most traditional manner. Vodafone has offered tariffs on speed tiers with the £30 a month tier offering the ‘fastest available speed’, which might vary dependent on where you are. Three is offering 5G connectivity for free for anyone who has an unlimited 4G contract. The £22 a month deal is SIM-only.

O2 is the only one not to release pricing for its 5G data tariffs, being the last to market, though it certainly has taken the opportunity to undermine the promising progress made by rivals.

Although few in the EE offices will be happy to backtrack and have a rethink on the unlimited plans, it does now look to be in a very competitive position. It is the most expensive, but it does have the best network and most consistent, high download speeds. If performance is the measure of success in the consumers eyes, EE is certainly hitting the right notes.

Another factor to consider is the ‘swappables’ element of these deals. For those who sign-up to a 12-month SIM-only deal on 5G for £44 a month, three ‘swappable’ content deals will be included. Each month, customers will be able to elect which bundled content services they desire, ranging from zero-rated video data or music, additional roaming locations, BT Sport or Amazon Prime Video.

The team could probably do with negotiating a few more partnerships as it does look a bit thin on the ground, though it is a reasonable offer.

What we are yet to see from EE is an aggressive push towards the convergence game. Executives have been giving the same presentation at conferences for years, promising a seamless connectivity experience for customers through mobile, broadband and wifi assets, though there doesn’t seem to be much activity on the marketing front to link-up these elements in one conclusive offer.

Either there is something in the pipeline or this is a case of negligence. The combination of EE mobile and BT’s wifi and broadband assets would create a connectivity offering few could dream to compete with. Three and Vodafone are plugging into the convergence game with their own fixed wireless access (FWA) offerings, but EE seems to be lagging here. The opportunity to make noise is there but the team seem to be enjoying the uncomfortable silence.

EE is arguably the market leader in the UK, though thanks to O2’s MVNO relationships it can claim to be the network with the most mobile connections running across it. With the unlimited offer, bundles, biggest and best network coverage and BT’s wifi and broadband assets, EE has an opportunity to nail itself down as the top mobile provider in the UK.

Trying to pick out the winner in the UK’s 5G race is starting to get very difficult.

BT streamlining continues with reported £100m Dutch infrastructure sale

UK telco group BT is reportedly flogging £100 million of infrastructure assets in The Netherlands as its new CEO strives to make it a leaner operation.

BT doesn’t seem to have said anything official yet, but the Sunday Times got the scoop regardless. Apparently this is part of an attempt to streamline the struggling Global Services business, as BT currently uses its own infrastructure, such as towers and cables, to connect its Dutch business customers.

There’s not much more to the report other than a claim that, while BT is also looking to streamline its Global Services operations in other regions, including Ireland, Spain and Latin America, it doesn’t plan to completely abandon specific countries.

The report also refers to a previous Sunday Times scoop that BT is also flogging a legal software service called Tikit. It’s reasonable to ask what the hell BT was doing in the legal software business in the first place and if this is indicative of the kind of wild tangents the Global Services business has gone off on in the past, we can expect many more such disposals.

This news comes just days after it was revealed that BT was forced to hand over a bunch of cash to Ofcom due to its historical accounting incompetence. In addition BT announced last week that it was delisting from the New York stock exchange and earlier in the month decided to flog BT Fleet Solutions. Sadly for CEO Philip Jansen, none of this tweaking seems to have won over investors, with BT’s share price down by over 30% since he took over at the start of the year.

Ofcom fines BT for suspect accounting

Ofcom has fined BT £3,727,330 for reporting inaccurate financials to the regulator, leading to the telco paying lower administration fees to the regulator for five years.

One of the ways in which Ofcom funds its activities is to charge certain companies an annual administration fee. This fee is determined by the total revenues generated by the company. As BT reported inaccurate results between 2011 and 2015, it paid lower administration fees throughout this period.

BT has not contested the fine, and the full sum had been paid to Ofcom on July 29.

“BT’s cooperation with Ofcom in relation to this investigation has been extensive and productive,” Ofcom said in the report.

“Upon discovery of its error, BT informed Ofcom and committed to remedying the consequences of its error. BT has also undertaken extensive work to ensure that its final resubmitted turnover is complete and accurate; had Ofcom had to carry out this work itself, it is likely to have required significant resource and time to complete.”

Although BT does not have the most glimmering record when it comes to accounting in recent years, the telco did own up to the error rather than Ofcom being informed by a whistle-blower.

The error seems to have been identified by BT Group CFO Simon Lowth, who had only been in the role for a year at the time. In September 2017, documents were submitted to Lowth to review the submission of annual turnover for 2016. Upon reviewing the document, Lowth ordered an investigation into the previous submissions dating back to the original General Demand for Information in 2011.

BT believes the oversight was down to human error, an employee misunderstanding the data sources used, though it still does not the most complementary light on the accounting practices of the business.

Aside from this oversight, BT is still reeling from the Italian accounting scandal which was unearthed in 2016. The fraud cost the company more than £530 million, with £8 billion being wiped off the telcos market value in a single day. US investors, represented by law firm Robbins Geller Rudman & Dowd, have recently announced a lawsuit to recover some of the losses.

The £3,727,330 fine might be considered a relatively lenient one, though generally regulators are kinder to the guilty party if it admits to wrong-doing without prompt. The sum was calculated by adding the deficit to interest payments. The Bank of England base interest rate during the 2011-15 period was increased by 1% to get the total.

It is difficult to blame the current management team and workforce for this error, it would have been prior to the tenure of many employees, though it does not reflect well on a company which is attempting to prove it is a successful business.