ALEX BRUMMER: BT’s second rate reforms are not good enough


Change comes to BT very slowly. Successive bosses have talked of convergence, promised better for consumers and to eliminate the treacle layer of management.

Yes, it is now much easier to get a landline phone fitted than in the past.

But much of the infrastructure which BT owns is decrepit, still too difficult to access for competitors, and far from being fit for purpose for modern Britain.

How churlish it would be not to applaud the new focus on service unveiled by the BT’s current blue-eyed executive consumer boss, Marc Allera.

The promise to bring call centres back to Britain is a pledge restated. It was meant to have been done already but customers are now promised transformation by 2020.

Telly targets: If BT wants to see subscriptions surging it needs a re-think on pricing and multiple screens

Telly targets: If BT wants to see subscriptions surging it needs a re-think on pricing and multiple screens

Telly targets: If BT wants to see subscriptions surging it needs a re-think on pricing and multiple screens

Then there is the whizz-bang idea of kiosks in mobile offshoot EE shops where we can all drop in and get to see a human being. Sounds great but could not be done properly without a regiment of technicians. This at the moment the group is pledging to shed 13,000 jobs.

Allera is also offering a technical fix through a hybrid broadband technology, which brings together 4G mobile with fixed-line broadband to boost wifi. 

I wouldn’t claim to be an expert but we have seen enough of BT’s compromise technologies in the past, including efforts to speed signals down old copper wire and fibre on copper wires, to distrust them.

What the UK needs and deserves in the post-Brexit Britain era is super-fast broadband like South Korea, Estonia and Spain. It is not good enough for BT to simply claim that it was much easier to wire up Spain because more people live in apartments. The time for excuses is over.

BT needs to follow the Vodafone example and go out into the market and find infrastructure partners willing to fund some of the £30billion or so investment to lay fibre across the country.

The present half-hearted approach is not good enough. Everyone who is a BT subscriber cannot but applaud new swap arrangements on programming with Sky or the prospective arrival of Amazon productions through the same set-top box.

But if BT wants to see subscriptions surging it needs a rethink on pricing and multiple screens. The last sports price increase was notified without any reference to the previous subscription – a nasty trick learned from the insurance industry.

Multiple boxes require multiple subscriptions, in sharp contrast to Sky.

Allera is now the early favourite to succeed current BT chief executive Gavin Patterson. 

What it needs is a focused technical leader who recognises the infrastructure deficit in much the same way as James Murdoch did at Sky. Enough already of the marketing gobbledegook.

Off the rails

The cry of ‘Renationalise all the train services’ is certain to go up following the latest debacle on the East Coast railway.

It has been in and out of public ownership four times, with Virgin Trains East Coast (actually Stagecoach with a coat of paint) the latest private sector consortium to hand back the keys.

Whether this really represents a £2billion bailout, as former Labour transport secretary Andrew Adonis has claimed, is a moot point. What is clear is that the Department for Transport, which let the deal happen in the first place, had stars in its eyes.

The passenger projections made by Virgin and Stagecoach were over-optimistic and the modernisation promised by Network Rail slow to be delivered. 

The service, if not good enough, is immeasurably better than in the bad old days of British Rail.

What we can be certain of is that if the network were to renationalised it would quickly become the victim of Treasury parsimony and long-term investment stymied.

It may look politically unpalatable, but what is needed is a contract which gives the operator room to renew rolling stock and run a reliable service. Some fares may have to rise but, with modern yield management as used by airlines, it should be possible.

Health warning

Israel may not be flavour of the moment after the brutal put-down of Gaza rioters.

But it is not discouraging foreign investors. 

Warren Buffett’s Berkshire Hathaway has doubled up on its investment in generic drugs champion Teva and now has a £513billion stake. 

Credit Suisse is committing £185million to its healthcare fund aMoon-II.

But the feel-good factor could dissipate very quickly.

 



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