When Ben
Verwaayen, then a general manager for ITT, was approached
in 1988 to take on the top job at the Dutch telecom operator,
his first response was to say that there was no way he
would work for a phone company. But Verwaayen, who has
a master's degree in law and international politics, ended
up accepting the job as president of PTT Telecom (now
known as KPN). He subsequently became chairman of Unisource,
a phone company consortium that included Sweden's Telia,
Swisscom and Spain's Telefónica, and then of another
venture between AT&T and Unisource. Now after a five-year
stint at the telecom-equipment maker Lucent Technologies,
the 50-year-old Dutch national is back at a phone company,
in the role of CEO at British phone operator BT. Excerpts:
TIME: How has the telecom market changed?
Verwaayen: Two or three years ago there were a lot of new entrants with a strategy based on building a rapid footprint and on the assumption that growth in the market would be in high double digits. They focused on the fast introduction of new technologies and underestimated issues in the back office and the alignment of certain generations of technology. The projected growth was not realized, but there was healthy growth in volume. Another important change is the move to broadband. Broadband blurs the lines between voice and data so the regulatory environment needs to be adjusted.
TIME: Mass market broadband in Europe has been excruciatingly slow in coming. Will BT's recently announced plan to target 1 million Asymmetric Digital Subscriber Line (ADSL) broadband connections by summer 2003 and its move to cut consumer connections from $35 to $21 a month help change this?
Verwaayen: Our plan will substantially cut
prices, and alternative providers |
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| BEN VERWAAYEN For us the challenge is to find a business model that is cost-based and understood by investors |
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and content providers will
see this as a boost. But the real question
for the consumer is, What do I get? If I knock
on the door of a typical household and start
talking about ADSL, they are more likely to
think I am talking about a disease than a
telecom service that will bring them benefit.
We need to find a way to translate this service
into added value. This is not just a telephone
service — it involves the content industry
and the distribution industry and gives them
a unique opportunity to innovate. For us the
challenge is to find a business model that
is cost-based and understood by investors.
TIME: BT's international expansion
was once the envy of Europe — it spurred
a nervous frenzy that led to the creation
of alliances like Unisource. Ultimately all
of them failed, including Concert, your joint
venture with AT&T. What are the lessons learned?
Verwaayen: There is a market and
a market need for global networks, but the
industry has yet to come up with a business
model that works. Top corporate customers
demand three ingredients: the lowest possible
price, the latest technology and the highest
performance. That's a hell of a tall order.
Concert tried such an effort and failed. We
are rolling back the parts that belong to
BT so that we can make an offering in the
market. We have to decide what part of the
market we want to be in because being everything
to everyone clearly isn't working.
TIME: What is your strategy going
forward, given that BT is being squeezed by
fixed-line and mobile competitors in the U.K.?
Verwaayen: BT is a very strong
brand regardless of the storm it went through.
The big issue is whether there is enough of
a wow factor. What we have to do is innovate
not only in service but in service packaging
so that what we offer is seen by our customers
either to improve productivity or to improve
lifestyle.
TIME: Has any phone company in Europe
come close to getting it right? Which company
do you admire?
Verwaayen: I have been in the telecom
business for 27 years, and for a long period
of that time I tried to compete with BT. Every
telco in Europe used BT as the benchmark.
That position is now vacant. BT lost it, and
we have to get it back. My hope is that within
a couple of years all the telco executives
will once again be irritated by BT and that
we will again be No. 1. |
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PROMOTION
