BT sees huge revenue and growth potential in new wave businesses - ICT, mobility and broadband - both for itself and for its wholesale customers. This is why we continue to invest in order to stay efficient, to remain competitive and to ensure delivery of a world where everybody has access to modern communications.
Taking advantage of this opportunity is particularly important at a time when the industry is facing significant challenges. Over time, Voice over IP (VoIP) will increasingly replace circuit switched communications as the preferred method of communication. And this poses a very significant threat to the business models and strategies of the telecommunications operators, BT included. In a sense, these challenges are a continuation of the tremendous price pressure that the industry has experienced. For example, in the last 10 years international traffic into and out of the United States has quadrupled, whilst the revenues associated have fallen from $11 billion to $8 billion - a proportional drop in revenue of 80 per cent in 10 years.
For former incumbent network operators, devising a direction for the IP future which is profitable and will sustain growth is the critical strategic challenge. Many operators have decided to minimise outgoings, keep their heads down, and see what happens. The danger is that with IT companies well positioned to succeed in this environment, traditional telecommunications companies could soon find themselves providing commoditised transport services. The intelligence, and therefore value, would be created and located outside the network.
With 21CN, BT has taken an altogether more radical approach.
21CN will take advantage of the opportunities that new wave businesses offer and will be the enabler of BT’s growth, as well as a tremendous support to the vibrancy and success of the digital networked economy in which we now operate.
However it is an immense challenge on several levels. On a technical level, new networks need new architectures and the skills to build and maintain them. On a financial level, the investment required to build a national IP network is colossal. On an operational level, working with customers, strategic partners, investors, employees, Government, the regulator and all other interested parties is a huge challenge. However BT intends to step up to these challenges in order to ensure that 21CN fulfils its enormous potential.