Steering BT into profit
By David Clerkin, Markets Correspondent
When Chris Clark came to Ireland to take up his current job, he did not expect that more Irish people would think of BT as a Dublin department store than the global telecoms giant he worked for.
Three years on, and a week after his 41st birthday, he no longer worries.
As chief executive of BT Ireland, Clark has put an end to the company’s status as a perennial loss-maker. At last, he has turned the former Esat, which has eaten up more than €1 billion since BT acquired it in 1999, into a cash generator.
‘‘It’s certainly not time to get out the champagne and celebrate,” he said. ‘‘We are making good progress but there’s a lot more to do.” It’s been an eventful three years.
Last summer saw Clark take the highest-profile decision of his tenure when BT quit the residential telecoms market, signing over its 80,000 fixed-line customers to Vodafone.
The move was seen as a sensible one, as BT had always struggled to make an impact in the consumer market. Despite having a high profile around the world – and especially in Britain and the North – the company found its consumer offering in the Republic stuck in a rut as little more than a re-seller of Eircom’s services.
‘‘In reality, the consumer market for us in the Republic has always been relatively small in terms of contribution to the business. That was quite misunderstood, which, to be honest, we have only ourselves to blame for, ” he said.
It fell to Clark to decide that it was time to focus instead on BT’s core global business – providing networks, IT and communications services to the business and corporate market.
‘‘A single catchword I’d use is focus,” he said. ‘‘We’ve been working quite hard locally on what we’re good at – from a customer perspective – and making a series of really bold and brave decisions in recent years to refocus the business in the Republic.
‘‘The thing that surprised me most in my early months was the perception of BT in the Republic market. Having worked for BT in the UK, Asia and the States, BT is perceived differently in different geographies. But on the whole, BT would be very much seen as a leading global ICT [information and communications technology] company.
‘‘So I guess I thought when I came to Dublin it would be the same, but actually what struck me very quickly – and I can see why – was what I’d call the Esat legacy.
The perception was that we were really a consumer business.” Not any more. ‘‘We’ve managed to differentiate ourselves from a lot of the competition. One of our true differentiators is we are a true global company in this marketplace.”
According to Clark, the money is in selling high-end networked services to Ireland’s biggest companies – banks, multinational pharmaceutical and IT giants and three of the four mobile networks, whose calls are routed through BT’s infrastructure.
He said BT still provided services to consumers, citing the example of those who transferred to Vodafone last year. ‘‘Vodafone is using our network infrastructure and, ironically, we are investing more euros in it than before – just not on the marketing side.” In addition, BT won the contract to provide the 999 or 112 emergency service last year.
Clark’s strategic offensive means he must juggle two very different jobs – running BT’s corporate focused business in the Republic as well as its consumer and business offering in the North, effectively a smaller version of BT’s core British business. He describes his lot as complex but rewarding.
‘‘If there is such a thing as a normal week, my time tends to be split.
I tend to do a couple of days in Belfast, a couple of days in Dublin and a day a week somewhere else. That could be Cork, it could be Derry, it could be London.”
But does his focus on the corporate market in the Republic mean that BT is in danger of backing a horse that will struggle as corporate customers slash spending in response to the economic meltdown?
According to Clark, businesses know that putting off investment now is more expensive in the long run.
‘‘You can freeze investment in networks and IT for a period of time, but you have to keep investing, otherwise everything’s going to collapse on you. It’s the same for us in our own investments and networks.
You have to keep investing – otherwise you’ll really feel the issue in two or three years’ time.”
He also offers reassurance on BT’s long-term plans in Ireland to the company’s 3,000 staff based here.
‘‘While we would certainly recognise that Ireland faces challenges, they’re all different in every country in which we operate. It’s not a case of, ‘We can’t work out what we’re going to do in that market, so let’s get out of here’.
‘‘We’ve got a very clear view of what we can do in the market. We think there are opportunities and also there are going to be challenges.
‘‘But we’re confident we have the strategy that will bring benefit to the business overall.”
He dismissed the idea of BT joining the group of global businesses that think it wiser to turn their backs on Ireland. ‘‘BT is very committed to Ireland. One of the great benefits of our partnership with Vodafone is that this is us investing for the long term as well.”
He said that working for a global business and having regular contact with peers in other countries helped put Ireland’s current woes in perspective.
‘‘There are common issues [across different countries], but there are also local issues. I do think that,18months ago, there was a very negative view of Ireland in the international community. I genuinely think though that Ireland has done a lot since then to give reason to be more positive.”
But he warns of a tough few years ahead.
‘‘There is no doubt that Ireland, like many countries, faces big challenges. It’s not going to be easy. I certainly don’t think it will be a quick rebound, if there is a rebound at all. I actually think talk of a rebound is slightly wishful thinking.
‘‘I’m not saying we won’t move into GDP growth. I have every confidence that we will at some stage, but I don’t think the world is going back to where it was.
‘‘Now that might feel a bit dramatic, and I’m not just referring to Ireland, I mean generally. This is far more deep rooted than a lot of people say – whether they feel it is a different matter, of course. That presents challenges, but I think it presents more opportunities than challenges for us.”
From his own perspective, however, there are pleasing signs of customers continuing to invest and what he sees as the ‘‘positive’’ development of Eircom being acquired by Singapore’s STT.
‘‘Whether one competes with them or collaborates with them, we do live in a complex industry. A strong former incumbent is important, so, in many ways, I absolutely welcome the purchase by STT.”
And after three years and achieving the breakthrough of generating profits, is there much left to achieve in Ireland and is it time to consider a job elsewhere within the group, which he joined in 1991?
‘‘I’m very relaxed about these things. That said, I’ve always said internally and externally that people can be in roles too long. It’s good for businesses to have a fresh perspective.
Now I’m not saying whether that’s three years or five, but I do think you need a fresh pair of eyes. We all get tied to decisions we’ve taken.”
He is keen nonetheless to pass on credit to the ‘‘very strong team’’ he has around him.
‘‘As a leader, you can only do three things. You can set the strategy, you can set the tone and you can build a team around you to help you deliver.
‘‘The success of any single individual is more about what happens after they’ve left than while they’re in the role.
‘‘In those contexts, we have made some bold strategic decisions, particularly in the Republic market, and at this stage they’re proving successful for customers, employees and shareholders alike.”
Clark is also careful to remember that not all the decisions facing him are his to take.
‘‘My role, and what I do, is not totally in my own hands – it’s in both my wife’s and my boss’s. I joke about it but it’s true. I think most people who are in senior positions know that to be the truth.”
