For this year’s Predictions for 2023 and Beyond event, I had the pleasure of sitting down with Marc Allera, CEO of BT’s Consumer division. We discussed some of CCS Insight’s operator and connectivity predictions, alongside recent developments in the UK telecommunications market.
There was one obvious place to begin: the cost-of-living crisis. When I asked Marc if it was fair of the industry to implement inflation-linked price rises, he acknowledged that many people are under pressure. However, he pointed out that spending on telecom services is far lower than on areas such as energy and council tax.
He added that operators are facing significant price increases themselves; running networks consumes a vast amount of energy, with wage pressure and rising component costs bringing additional problems. “The narrative from too many people in our sector (…) has focussed disproportionately on price,” he said, “and we have to get out of that cycle.”
Referencing the failure of several UK energy companies in 2021, Marc noted: “We certainly don’t want to see what happened with the energy infrastructure — where it seemed everybody just focussed on price and not value for money and a sustainable business model”.
I suggested that as a premium provider EE could be worse-affected than rivals by households cutting spending. Marc stressed that EE isn’t complacent, and recognized challenging times ahead, but said that its superior network and services would enable it to weather the storm.
But what’s EE doing to help struggling customers? Marc said that parent BT recognizes a responsibility to serve all customers and that the firm is leading the way on social tariffs for home broadband, which it plans to expand into mobile.
Earlier in 2022, Marc said that the next chapter for BT’s Consumer business would include services beyond its core connectivity offers. When I asked him to elaborate here, he told me home security would be the initial focus and teased upcoming announcements. He added that EE’s strategy wouldn’t be to go it alone — the industry has already produced several unsuccessful solo forays.
Gaming and insurance are also on EE’s road map. This makes sense; they’re household services that can use an operator’s capabilities in areas such as connectivity, billing and customer service.
Marc was less convinced about opportunities from connected car services. I shared a prediction that operators will forge partnerships with vehicle manufacturers to bolster consumer 5G plans — T-Mobile US already has a service called Magenta Drive, in collaboration with BMW. But Marc believes this is a “difficult place to go”, pointing to existing platforms on many vehicles. EE would rather focus on parts of the market where it can offer services that others can’t, he said.
I was keen to hear his view about our prediction that operators may start to move away from naming specific technologies in marketing. In this scenario, services would be labelled under the broad banner of connectivity rather than using terms such as 4G, 5G, fibre and Wi-Fi. The aim would be to simplify tariffs and boost convergence strategies.
Marc agreed that the industry often makes things unnecessarily complex for customers, but added that it would be a bold decision to move away from these terms entirely. He pointed out that although people may not understand exactly what 5G is, they do know that it’s better and faster than 4G. He also highlighted BT’s migration onto a converged mobile and broadband core, offering a more seamless customer experience (see Insight Report: BT Places Reliability at the Heart of Its Network Vision; for more information on accessing our content, please get in touch).
I asked Marc for his views on the controversial topic of big tech companies contributing to the cost of deploying telecom networks — we have a prediction that it’s mandated in at least one European country by 2025. I suggested that operators rely on the likes of Amazon and Netflix to upsell their services, and that the industry’s unlimited data plans have been a major driver of ballooning use.
Marc responded that in a complex technology network all players should contribute, calling for dialogue to improve customer experience and create opportunities for more revenue. He advocated for a review of 20-year-old Net neutrality principles to help improve the efficiency of the Internet and control traffic at peak times. “We could have simultaneous Premier League games, video game downloads and software updates all hitting the network at the same time”, he said. “There is no way of coordinating that and that’s inefficient — and can lead to experiences for consumers that aren’t as great as they could be”.
My final question concerned the recent appointment of a new prime minister and culture secretary in the UK — at the time of the interview, the prime minister was Liz Truss. What could they do to improve connectivity in the UK? Marc said that politicians need to better balance the short term and long term, incentivizing investment and encouraging companies to come to the UK. He said that the industry has been obsessed on offering the lowest prices, rather than promoting innovation and quality.
Marc also shared some predictions of his own: he sees e-SIM becoming mainstream by 2024; forecasts strong growth in wearables; and suggests the beginning of the end for passwords.
I really enjoyed our discussion and would like to thank Marc Allera for his insightful and open views. You can watch the full interview below.
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