Predictions Week Video Highlights: Marc Allera, BT

Excerpts from our video interview with Marc Allera, CEO, BT’s Consumer Brands

My recent interview with BT’s Marc Allera as part of our Predictions Week shone a spotlight on many of the challenges facing telecom operators in the UK. Below is a video with 15 minutes of highlights from the full 30-minute interview.

The discussion covered many different areas. We examined what impact the pandemic has had on the market so far, and we agreed that one benefit for communications providers is that consumers and businesses now value connectivity more than ever before. Whether working from home, enabling your children to learn remotely or having high-quality entertainment reliably streamed into your home — particularly during lockdown periods — connectivity was a common theme.

Marc also expressed his view that the telecom sector has seen “a greater awareness of decommoditization” as people recognize the importance of connectivity, the role that BT and other players play, and the importance of the sector to the UK and its future success.

However, as data consumption grows, sustaining profitability is paramount. Marc made the interesting observation that the shift to unlimited tariffs and super-fast broadband through fibre-to-the-home connections has created an environment in which some people are using 50% more data annually, but don’t feel they need to pay any more for the service.

BT is trying to solve this conundrum by imposing annual, predictable price increases, and in some cases has met with criticism in the media. The company is trying to overcome this by improving its overall offering to customers, be that through better customer service, a high-street presence or bundles of converged services. Marc’s philosophy was clear. He believes that “customers may be able to buy cheaper, but they won’t be able to buy better”.

It’s an interesting approach as we enter tough economic times, and Marc was happy to acknowledge that challenger brands, among which he included not just Three and TalkTalk but also Vodafone and others, are proliferating. It certainly made me when smile he noted that “even the challenger brands have created challenger brands”. He went on to justify the premium positioning he is maintaining at BT, stating that the cutthroat pricing strategy of some rivals didn’t make sense to him — “the challengers still need to make money”. It will be interesting to see how this approach plays out.

Our discussion about 5G deployment priorities in the light of the pandemic is also well worth watching. We discussed whether it still makes sense to focus on city centres and places where people congregate, such as football stadiums and airports. Marc wondered whether operators should divert some of that investment into underserved areas such as Cornwall. This is very much in line with a prediction my colleague Kester Mann shared during our Predictions Week event; it stated that “from 2021, operators shift their network deployment priorities away from city centres”.

On the topic of 5G, Marc also gave his own prediction, which he went on to describe as “more of an ask”, that he would like to see a 5G phone with a retail price of £100 available in 2021. This has certainly caught the attention of some mobile phone manufacturers I spoke to after the interview was first broadcast.

Finally, if you’re a sports fan, watch out for Marc’s comments about the future of sport and BT’s relationship with sport. As well as heading up BT’s consumer business, EE and Plusnet, Marc is also responsible for BT Sport. There’s no doubt that some in the football industry will be concerned when they hear his comments.

Enjoy the video, and feel free to leave comments if you have any thoughts you’d like to share.

If you’d like to see the full video of the interview and recordings of all the sessions from our Predictions Week, please get in touch.

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