Jane Wakefield: High Noon at BT

The proud lumbering dinosaur splits in four, pleasing the City
Written by Jane Wakefield on

At high noon on Thursday, the Internet Wild West gained another gunslinger as BT (quote: BT) burst through the saloon doors to claim back some of the territory it has lost to the dotcoms.

To the soundtrack of Lovely Day, BT decided to come into the 21st century -- presumably the start of the promised transformation from dinosaur to mammal. In response to criticism and sliding shares, BT has restructured itself, creating four new companies to look after its Internet, network, mobile and e-commerce interests and dividing its fixed line business into separate wholesale and retail businesses.

The press conference announcing the new wave BT was a very different affair to the usual BT offering. Previous memorable press occasions include the now-famous lollipop man speech from chairman Iain Vallance, in which he claimed Internet enthusiasts were over-exuberant children and the telco's job was to calm them down. Then there was the press conference at ISPCON where BT played Gloria Gaynor's girl power hit I Will Survive. Not to mention Peter Bonfield's bizarre advice to those not able to afford Net access at home to go down to their local school to get online.

Now things are different. Now BT is on the offensive rather than defensive. Now BT is trying to sell itself rather than hold on to its position. It has enjoyed monopoly for long enough and it is wise enough to realise that its position of power is coming to an end. Local loop unbundling may still be a speck on the horizon -- and BT will hold out as long as it can -- but it is looming. Oftel has already announced the 14 alternative operators that will be queuing up outside BT's exchanges to offer broadband services come July 2001 -- trials will begin in January.

So now we see BT speaking the language of the dotcoms -- referring to IPOs, synergy and global footprints. We see three out of six of the new boys appointed to head up the new companies not wearing ties. We find out that BT itself will be queuing up outside the exchanges of other European telcos to offer broadband services in an unbundled Europe.

The City certainly thinks BT has made the right choice in splitting itself up -- while all other tech stocks nosedived yesterday, BT's were up. In the world of the Net where most of the good ideas came from garages, small is beautiful. And with 120,000 employees and a self-confessed admittance it is "lumbering", the telco was just too big to react quickly to new markets and new ideas.

BT is banking its future on its change of image and has obviously put a great deal of thought into its new names. BT's Internet interests are now combined in openworld -- note the use of lower-case (essential in an Internet company). Ignite is hoping to set the world alight with its broadband data networks, BT Mobile may well be about to pay an astronomical sum for a wireless license and Yell (the directories and e-commerce firm) is about to find out what IPO means.

But will the mindset of the telco change with the name? It is too early to say but I doubt if the battle between the forward-thinking Internet fans at BT and the old school who still believe in the days of monopoly are over. BT can restructure all it wants to please its shareholders, but there are many, many irate customers from ISPs to ordinary people in the street who will take more convincing.

BT's new-found passion for the Internet has more to do with necessity than choice. For years, BT kept pay per minute charges for data calls, offering unmetered only after immense pressure from the government. For five years, it kept ADSL technology in a drawer, pulling it out only when it thought it could make money out of it. It argued about the need for local loop unbundling when everyone else in the industry saw it as the only way to introduce competition. Is that the workings of a company passionate about the Internet? Make up your own mind.

The original poster for Gary Cooper's classic Western High Noon tells us it is "the story of a man who was too proud to run". Pride and BT have gone hand in hand for years and the question now is whether it is ready to swallow some of that pride to compete on the more level playing field of an unbundled Britain.

What do you think? Tell the Mailroom. And read what others have said.


Delta Air Lines just made an embarrassing announcement (you may be livid)

Delta Air Lines just made an embarrassing announcement (you may be livid)

On July 12, we'll see the universe like never before

On July 12, we'll see the universe like never before

US weather, climate forecasting is about to get way better

US weather, climate forecasting is about to get way better