An interview with Chief Executive, Sir Peter Bonfield

Sir Peter Bonfield joined BT as Chief Executive in January 1996. Sir Peter was chairman and chief executive of ICL from 1985, and remains ICLís non-executive chairman. He is a member of the Presidentís Committee of the CBI and in 1994 he participated in the high-level working group established by the European Union to consider the creation of the Information Society. Welcoming him to BT, Chairman Sir Iain Vallance commended his wide international experience and in-depth knowledge of the computing industry as key to the next phase of BTís future.

What are your first impressions of BT?

I knew BT from the outside before I came here, both in the UK and from an overseas perspective. And I think itís worth repeating that, internationally, BT is very well regarded. It is perceived as the company that has made a success of privatisation, and is making a success of globalisation.

From the inside, my first and overriding impression is of a company facing enormous opportunities in an exciting and dynamic industry.

These opportunities are of three kinds. In the UK, we need to work to grow the market by encouraging greater use of basic telephony services. The advanced services market is also very important for us. New technology is making possible new ways of accessing and interacting with information. Finally, as telecoms markets around the world liberalise, major opportunities will be created for those companies that are fast enough on their feet.

What is your vision of the kind of company BT might become?

BTís vision says it all really: to become the most successful worldwide telecommunications group.

Few other companies could even aspire to such a goal, so how are we going to do it? Well, for a start, we need to be even more focused on customer requirements; more committed, innovative and flexible and quicker to market. But, we also have to do new things in new ways. BT is a company in transition - from telecommunications company to communications company.

What issues are at the top of your list of priorities?

First and foremost, is continuing to deliver world-class services to all our customers at a cost that compares well with the best in the world.

To do this, I have to focus on the people, resources, skills and systems we will need to become more flexible, more decisive and more accountable. At the moment, I am introducing trading units, with individual managers having much greater responsibility and accountability for their profit and loss performance. And we need to be better at judging our performance by the measures that really matter to our customers. Then there is the share price, which has hadits upsand downs in the last few years. My entire team is committed to making long-term shareholder value a priority.

It is also vital that we continue to develop as a global player in a global market, either through direct entry or joint ventures and partnerships of all kinds. The termination of merger discussions with Cable and Wireless in no way changes our basic strategy; the credibility of the BT/MCI alliance in global markets is uniquely high and many other players want to join our 'family'.

And finally, but not least, there is developing revenues - and I mean profitable revenues - in advanced services: Internet services, multimedia, systems integration and so on.

How are you finding working in an industry that is as highly regulated as BT?

Regulation is a fact of life. It is one of the issues that we have to deal with, but then all companies have issues that they have to deal with. Nor is it special to the UK; all the overseas markets that we operate in are regulated to some degree.

As we go to print we are awaiting the outcome of Oftelís consultation on the price cap that will apply to many of our main prices from the middle of next year. The media have tended to present this as a confrontation between BT and Oftel. This is wrong. It is a debate about the industry as a whole, about whether or not the regulator is genuinely promoting competition or risking stifling investment.

Also at stake are the powers that the regulator wishes to adopt to deal with what he regards as anti-competitive behaviour. We have been arguing for some time that too much power should not be invested in one person and that the regulated companies should have a right of appeal against decisions that they feel are misguided.

BT has welcomed the DTIís Information Society initiative; will BT be playing a part in the development of the Information Society?

The answer is, of course, yes. But, inevitably, it again raises the issue of regulation. My view is that the Information Society will only be built with private capital, but that will only happen if there is incentive to encourage the necessary investment.

BT is already involved in a number of products and services relating to education, healthcare, entertainment, public information and so on. We are well into a major marketing trial of interactive services, including video on demand, home-banking and home-shopping. Just in the last few months we have introduced a BT Internet service and Wireplay, a multiplayer games service.

These new services show that commercial and social benefit can be two sides of the same coin. There are still major issues to be resolved, issues like the usability, cost and availability of the new services, but I do believe that our industry can be seen, and will continue to be seen, to be making a genuine contribution to the communities in which we operate.

Sir Peter Bonfield CBE
Chief Executive
21 MAY 1996

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