The Big Interview: Sir Terry Matthews

Telecoms billionaire on the future of IP, his dreams for the 2010 Ryder Cup, BT's network delays and why politicians struggle with technology

By any standards, Sir Terry Matthews ranks as one of the UK's leading technology pioneers and entrepreneurs of recent times. Born in Wales in 1943 with dual British-Canadian nationality, Matthews founded a stream of successful telecommunications companies after moving to Canada over 30 years ago.

But unlike more recent tech entrepreneurs such as the Google's Brin and Page, Matthews' career didn't begin in the hallowed halls of academia but somewhere slightly more mundane — electric lawnmower sales to be exact. His first company in Canada was Mitel, co-founded with friend Mike Cowpland, but the enterprise floundered when the pair found that selling lawnmowers in the snowy Canadian winter was beyond them.

Not that Matthews takes the blame for this fiasco. "That taught me a key lesson — the importance of timing," Matthews told us, insisting that he and Cowpland were blameless. "The shipping company lost the lawnmowers! By the time they showed up no-one wanted them, as you can't cut grass when it's covered with snow."

Matthews and Cowpland bounced back from this disaster, and developed a dual-tone multi-frequency tone receiver, used to signal over a telephone line. A fraction of the size of competing products, it yielded huge profits and turned Mitel into a successful manufacturer in the voice communications market.

The company was later bought by British Telecom, where Matthews was once a teenage apprentice. He then moved from voice networking into data with Newbridge Networks. The move made Matthews a billionaire, on paper at least, when Alcatel paid $7.1bn in stock for Newbridge Networks.

Today, Matthews is chairman of Wesley Clover, which invests in technology companies, and director or chairman of a selection of small IT firms. He has also risen to prominence through his ownership of the Celtic Manor gold resort. The site will host golf's Ryder Cup in 2010 and Matthews is determined to make it the most high-tech golfing tournament ever.

"There'll be seventy or eighty thousand people there every day," he enthuses with evident pride. "Broadband and WiMax will be available right across the course, and we'll install huge video screens so you can see all the action from anywhere on the Resort."

Video screens, Matthews reveals, are firmly on his radar. "You can expect to see Wesley Clover go into very large video walls. You can do them at a very low cost, now, thanks to the drop in LCD prices."

Matthews has founded some 65 different companies throughout his life. He now has an active interest in just 20 of those firms, as many have been been taken over. Few of these 20 are household names — although VoIP networking firm Newport Networks did hit the headlines when it floated in 2004.

With many successful businessmen, the question arises as to why they continue working rather than retiring to a beach hut or indulging in a private passion, such as hot-air ballooning around the world.

Matthews' reply is brief. "It's fun," he insists. This enthusiasm extends to even the smallest companies, such as INUK, which offers broadcast TV over IP networks. INUK runs its service on several university campuses and Matthews revealed...

...that it is also working with Cable & Wireless and hopes to launch a commercial service over its UK network in the first quarter of 2007.

Given the dreadful service provided by Cable & Wireless' Bulldog operation recently, such a deal might not be seen as a great idea. But Matthews insists otherwise.

"Cable & Wireless's problem was customer service. Now they're buying wholesale services from people who can do them, and concentrating on running their network," he explained.

He is more critical of BT and its ambitious 21st Century Network (21CN) project. 21CN is BT's attempt to rip out decades of legacy networks and replace them with a single, IP-only network. On paper, this sounds like the kind of project that Matthews would warmly support. However, he's most unimpressed that BT has been forced to push back the completion of the project by a year to 2011.

"I'm disappointed. You've got to question whether BT picked the right vendors," he says, pointing out that a multimedia network like 21CN needs to be quick enough to support the most bandwidth-heavy applications.

BT has kept very quiet about the causes of 21CN's delays. Indeed, the telco has been extremely reluctant to admit that the delays exist at all.

Matthews does have a small vested interest. If BT had chosen to take equipment from Marconi, then his Newport Networks would have benefited. Instead, BT shunned its fellow UK firm in favour of the likes of Cisco, Huawei and Ericsson. Newport has subsequently struggled to finalise a sale with another, unnamed, UK telco, and Matthews clearly fears that BT's 21CN struggles aren't helping.

"BT's delays take the pressure off everyone else," he warns, arguing that a year's delay to 21CN means rival operators needn't rush to sort out their own next-generation networks.

Matthews became "Sir Terry" in 2001, having picked up the OBE in 1994. In person, he's a warm, friendly character. But he reacts most indignantly to the suggestion that his working career began with Mitel, pointing to his apprenticeship with BT where, he insisted, he had been "making history" at its Goonhilly satellite operations.

Today, Matthews is a fully paid-up member of the establishment. He agrees with comments made by Eric Schmidt of Google who warned in October that politicians don't grasp technology issues, but Matthews believes politicians aren't solely to blame for their IT ignorance.

"A sea change is taking place, as we move from narrowband to broadband," said Matthews, comparing it to the move from canals to railways. "Look at DSLAMs (DSL Access Multiplexer). They cost $1,000 per port four years ago, now they're being offered for $9 a port."

No politician, unschooled in IT, can be expected to keep up with such technology changes and map the nation's destiny, Matthews argues.

But, as one who moves in these exalted circles at times, he claims to understand how to deal with politicians tech shortcomings.

"You talk to them like this," he explained, waving his hands high in the air to illustrate a top-level approach. "The point where they can understand it is when you work through what the technology will do for them and explain why they really need it. Then, they get it."



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