Steve Haines, BT Wholesale: The youngest veteran in wholesale

Steve Haines is barely into middle age, yet he calls himself the ‘youngest veteran’ in the UK’s wholesale telecoms market.

“I was there at the beginning of BT’s move into wholesale, in the early days of my career,” he recalls. “I’ve seen all the changes the industry has gone through since then.”

Haines is MD of strategic business development with BT Wholesale, responsible for the company’s managed services offer. Before joining BT in 1990, he held various senior sales management roles at GPT and Plessey Communications.

In the early years of his BT career, Haines recalls the government review that ended with the abolition of the duopoly of BT and Mercury, laying the ground for the emergence of a slew of rival operators, many of which would become BT’s customers as well as competitors.

“I’ve seen our wholesale customers change from doing business with us because they had no alternative, to doing business with us because they wanted to. They certainly have a choice now,” he says.

Haines believes that BT’s swerve into providing managed services to other operators is just as radical and fundamental a change as that first move into wholesaling all those years ago.

He says the company needed a new direction, and that managed services was the obvious one.

“We’ve been on a managed services journey for the past six or seven years,” he says. “From being a normal regulated telecoms business to become a managed services provider has been an amazing ride. Managed services is already quite a mature line of business for us, and it continues to grow. It now represents about 27% of our external revenue, and has been growing by about three or four percent every year.”

Haines believes firmly that the importance of managed services to any modern fixed-line operator and service provider is huge.

“It keeps us relevant to customers as the industry continues to change,” he says. “We’re in an environment where there are major capital constraints on service providers, and consolidation in the supply chain. We supply these customers with a range of services, from the full outsourcing of their network to part of their business. We can provide a white label solution for them to sell to their customers, such as we’ve done for Orange and its broadband services.”

Haines refers to the 2010 announcement by which Orange handed over management of its fixed-line infrastructure to BT with the promise that it would be integrated into the incumbent’s network.

The idea of the deal was for Orange to catch a ride on BT’s national broadband infrastructure to provide a larger footprint to sell its own broadband service from. Over 60 Orange staff transferred over to BT as part of the deal, one of the more important in the company’s managed services history.

“What we aim to do is help customers to operate better in the marketplace with our fixed-line solutions, helping them tap new growth areas,” says Haines.

He says that in order to remain relevant, BT must battle to make its products more IP-centric to provide the best possible and most open platform for all types of service provider.

A particular area of managed services interest for BT is mobile operators, particularly in an era when they are eying new licences for new types of service.

“At a time when Everything Everywhere (EE) is preparing to launch 4G in the UK, it’s very exciting for all of us,” he says. “We’re pleased to be EE’s partner in that space, providing a radio access network for them and infrastructure of all sorts: fibre and broadband. They need this so they can give their customers the experience they want with their smartphone usage.”

Haines is not so naïve to think that supporting LTE is not going to be a challenge, but is convinced that BT has got the experience to pull it off: “We’ve been running a fixed-line network with full video and data capacity for 10 years now, so we have the track record that mobile operators need for 4G,” he claims. “With managed services, it’s an important job to support customers as they move from a legacy to a new world.”

To get to here from there has not at all times been an easy journey for BT, and a lot of cultural baggage had to go out of the window before it was credible as an outsourced services supplier.

“Six years ago, [managed services] was a nascent market for us,” recalls Haines. “We’d just separated Openview from BT Wholesale, and our approach to the market was having to change. It was time to create deeper partnerships with our wholesale customers, and start to look at managing their network needs for them, not just supplying them with networks as a component. We had to think about our reputation, and how it would be affected by a move into managed services. We were still seen then as just a regulated telecoms business.”

Part of the process of change was to convince customers that BT had any credibility whatsoever in services: “Our message had to be ‘We can do for you what you currently do for yourselves because we know how to do it for ourselves’,” says Haines. “As it happens, we know all about running a network, a NOC, a field force and customer management systems. It was slow to start with, but persistence paid off, after time spent listening to what customers wanted.”

The battle to convince customers that BT could do the managed services thing was waged in a very competitive environment. Haines said that not only did the company have to face down regular competitors like Cable&Wireless, but equipment vendors like Alcatel-Lucent and Ericsson, as well as an army of systems integrators, all of which had a long-standing reputation for managed services themselves, which often extended to full business process outsourcing: “The UK was and remains a very competitive place,” he concedes.

So has BT set a managed services pace that other European incumbents are now following? Haines is dubious about whether this claim holds water: “Each market in Europe is different,” he believes. “The UK has a traditional of much competition on the wholesale side, and has had that for 20 years now. Open networks are in our DNA, as is wholesaling. Moving up the chain to managed services created extra value for us. That model may be exportable, but no market is exactly like ours.”

But does BT plan to export its own managed services model outside the UK, considering its openly declared strategy is to extend its influence in a series of overseas markets?

“We’re primarily UK-focussed [with managed services], although we do work with our colleagues in global wholesale,” says Haines. “We’ve worked with them on an interesting new global IPX product. It’s about moving traditional traffic onto an IP platform and delivering it locally in an IP cloud.”

He cautiously believes that what BT has achieved with managed services could be replicated in other territories, ones where the company has already staked out an interest.

“We’re actively looking at expanding our interests in Africa, EMEA, the Far East and Latin America, and while there are no plans at the moment I don’t see why managed services could not be extended to those areas,” he says.

“We need to remain clear as to what our core competencies are however. We certainly won’t be competing with people like Cap Gemini in the BPO market, that’s for sure.” So where does BT’s managed services journey go from here?

“We’ll be looking to foster deeper partnerships with our customers, particularly in the area of networks,” says Haines. “We want to support them as a sales channel too, and help them sell more products and services to their customers.”

BT is continuously exploring how to help its customers grow their businesses and develop new capabilities.

In particular, Haines is looking forward to working with mobile operators in 4G: “We’re excited about what we’ll be able to offer with more fibre in the ground too. That’s certainly something our mobile operator customers want to see.”

BT Wholesale

History: BT is Europe’s largest wholesale communications business by revenue and market share. Through its wholesale division, it supports a range of communications providers from global operators to smaller, local resellers. It serves fixed and mobile services providers, internet service providers, communications services resellers, and global broadcasters and TV production companies, regionally or nationally in the UK or across 170 countries worldwide. In broadband, it offers copper-based services, as well as fibre to the cabinet and premises. It supports mobile operators through backhaul over both traditional data and next-generation Ethernet circuits.

Ownership: BT Wholesale is a division of BT Group, quoted on the London and New York stock exchanges.

Leadership: Nigel Stagg is chief executive officer of BT Wholesale.

Services: BT Wholesale’s services range from voice, broadband and data connectivity services to partial or fully managed services. The portfolio comprises traditional and next generation, IP based services. It is now expanding its business into new markets including digital content distribution, call centre management and optimisation, commercial online voting and cloud services.