Predictions Week Highlights: Interview with Marc Allera, BT

CEO of BT’s Consumer group discusses what’s in store for the operator

As part of CCS Insight’s Predictions for 2022 and Beyond event, I had the pleasure of sitting down with Marc Allera, CEO of BT’s Consumer division, to chat about what’s next in the UK telecom space.

Our conversation quickly turned to convergence, a strategic focus for BT in 2021 but an area where it also faces renewed competition, notably from the recently merged Virgin Media O2 and a resurgent Vodafone.

In February, BT bolstered its bundled services with the launch of Halo 3+, an offering that promises an “unbreakable” Wi-Fi connection in the home, using the EE mobile network as a backup to BT’s fixed-line broadband. It reflects BT’s premium positioning and desire to maintain connectivity leadership, as outlined during a recent event for analysts (see BT Maps Out Path to Converged Network).

But with UK consumers continuing to spend less and less on telecom services, I was keen to find out if BT plans to add more services to its telecom bundles in a bid to reverse the trend. It was a nod to one of our bolder predictions, that at least 20 network operators will offer healthcare as part of a service bundle by 2025.

I believe there’s an opportunity for operators to work with healthcare providers and insurers in areas such as online consultations, remote monitoring, prescription sales and lifestyle advice — a move that would play to their strengths in connectivity and data security as well as tapping into millions of customer relationships. Spanish operator Telefonica, for example, has a service called Movistar Health that includes access to a family doctor through video consultations, available at any time of the day and priced at up to €11 per month.

Although Marc wouldn’t be drawn on the healthcare example, he confirmed BT is “exploring new verticals close to home” in pursuit of revenue growth. But he also stressed that any foray into new markets is predicated on having high-quality fixed-line and mobile networks to support it, adding that “you have to do the basics brilliantly to be able to play in other areas”.

I was curious to hear Marc’s views on the future of retail. CCS Insight research has tracked an accelerating shift to online sales that started well before Covid-19 struck. Is now the time to re-evaluate the role of the humble mobile phone shop?

Marc acknowledged that the purpose of stores is evolving and that it’s highly likely we’ll see them decrease in number over time. However, he was careful to emphasize the value of face-to-face conversations, particularly when they involve decisions about very expensive smartphones, some of which now cost more than £1,000.

Asked about our prediction that a leading European operator will launch kiosk-style outlets with a dedicated focus beyond sales by 2023, Marc underlined the value of personal and private conversations in an environment where customers feel comfortable. He revealed that BT is carefully watching the work-from-home trend as it plans its retail strategy but is wary of making a knee-jerk reaction to changing behaviours caused by the pandemic.

When I questioned Marc about major lessons the industry has learnt from the pandemic, he immediately pointed to Net neutrality. He agreed that telecom networks had held firm during Covid-19, despite a huge challenge in controlling eye-watering volumes of traffic at peak times, for example at the release of new games and software updates, as well as during major sporting events. To maintain a high quality of service, he argued that operators need more flexibility to cater for surging and often highly unpredictable demand.

Like other operators, BT allowed customers to browse popular educational and support websites for free during the pandemic. But such a practice is at odds with current Net neutrality guidelines, prompting BT to review this approach. Marc’s view is that there are very good reasons to enable preferential access to certain platforms, notably to help the most vulnerable members of society and promote digital inclusion.

Marc’s comments were well timed, because in September, Ofcom kicked off a review of the current Net neutrality framework. Existing rules have been in place since 2016 following a protracted debate among EU members and regulators, but Brexit has forced a rethink. Ofcom plans to publish initial findings from its review in early 2022.

When I asked Marc for his own predictions for the coming years, he highlighted several areas including growth of the foldables category of smartphones, an opportunity for smart glasses to become more popular, the ongoing component supply shortage and accelerating deployment of 700 MHz frequencies for wide-area 5G coverage.

Check out the full interview below.