Tech billionaire sees telecoms turmoil ahead

In the fast-changing world of telecommunications, not even BT can count on being around in 50 years, warns Sir Terry Matthews

Sir Terry Matthews, the technology entrepreneur who became Wales' first billionaire, has warned that some of the major players in the telecoms industry risk disaster if they fail to adapt to the challenges posed by technologies such as IP networking.

Speaking to ZDNet UK on Thursday, Matthews claimed that some of the biggest names in telecoms could be obsolete in a few years.

"Even the biggest companies can get strategies wrong. Will BT be here in 50 years?" asked Matthews, founder of both Mitel and Newbridge Networks.

BT has embarked on an ambitions plan to build its 21st Century Network (21CN), where legacy infrastructure will be replaced with a single IP-based network. The rise of IP poses a major challenge to all telecoms operators, with VoIP threatening call revenues.

BT is spending around £10bn on 21CN, and is confident that it will make large savings in operational expenditure once it is built.

According to Matthews, the next few years will see huge consolidation in the telecoms market, leaving only the strongest standing.

"There will be some who will totally fail and some of these will be the biggest companies in the world, manufacturers and service providers. It is a time to invest — it is a time of change," said Matthews, who claimed that many future innovations in the telecoms market will be made in bedrooms and garages, not large R&D labs.

Having sold Newbridge Networks to Alcatel for almost £5bn, Matthews now runs a company called Wesley Clover, which invests in high-tech start-ups. There's little sign that his financial success has dulled his enthusiasm.

"Don't think about me as a venture capitalist... I'm about as far away from a flake as you can get, I have nothing to do with flakes. I'm a persistent son of a bitch, I'm determined and I win," said Matthews, speaking at a Wesley Clover event in London.

ZDNet UK's Graeme Wearden contributed to this report.