BT pins Google as 'our biggest threat'

As BT shifts into broadband content, the telecom's CIO identifies Google as a key rival--much to the bemusement of analysts.
Written by David Meyer, Contributor

LISBON, Portugal--Google is becoming BT's biggest competitor--that's the surprise assessment coming from the telecom giant's chief information officer.

Speaking at the Gigaworld IT conference here, CIO Al-Noor Ramji told delegates on Wednesday that U.K.-based BT needs to change to keep pace with fast-moving businesses such as Google.

"We see Google as our biggest threat," Ramji said. "They don't mean to...it's almost incidental." He acknowledged that Google comes from a "different world" but suggested that it had "morphed" into a different company and warned that Google could do anything BT could do in the consumer arena.

However, while conceding that he did not know the endgame, Ramji claimed that BT "can do anything Google can do" if it moves beyond its traditional role as a supplier of telecommunications services.

"I've learned that technology is the easiest thing to do. The transformation of the company is most important," he said.

Ramji also referred to the challenges that lay ahead in BT's expansion into Internet Protocol television (IPTV), with its BT Vision service.

Citing new online services such as YouTube, the CIO said BT's customers had "morphed into three different roles now: customer, supplier and competitor."

Analysts were quick to add a heavy note of caution to Ramji's statements.

"I think he's a little bit ahead of his time," said Lars Godell, principal analyst in Forrester's Telecom & Networks research team. "I give him credit for thinking ahead and being proactive about competitive threats. But on the other hand the question is, is the threat realistic? Google doesn't see BT as a competitor."

"I think consumers still need to pay for bandwidth. That's the business of a telco, and I don't see Google becoming a full service telco. I don't see Google owning an infrastructure," Godell told ZDNet UK.

Google has made some moves into the telecom space in recent months, with its involvement in the launch of free wireless services in California.

The search giant also sparked a wave of speculation in 2005 when it began showing interest in unused fiber networks. Analysts, though, suggested that Google was more likely to be looking at cutting the cost of connecting its data centers, rather than offering telecom services.

Referring to the services that BT plans to introduce later this year, Godell said: "It will take five to 10 years before those value-added services will become more important (than providing bandwidth) to a telco's revenue stream."

"I don't think it will be easy for BT or anyone else to move into content," Godell said, adding that "BT has been in IT services for 20 years--the skills that are needed to be successful in content are so different from those needed for telecoms."

He also suggested that the motivation for Ramji's statements may stem from a desire to fire up his IT team.

"Many executives like to talk about external threats--sometimes it's to energize their own organization, making sure they're not complacent, which is legitimate. They might exaggerate a little to get their attention and open up their minds a little bit--that's what he might have done."

The analyst also suggested that it could have been deliberate scaremongering by the BT executive.

"A lot of painful changes are taking place inside BT from an employee perspective," Godell said. "If you can use an external threat to justify internal changes, it's easier to sell internally."

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