Friday 28 October 2016

'I'll go toe-to-toe with any competitor as long as the playing pitch is level'

Shay Walsh of BT Ireland spoke to Sarah McCabe about the march towards cloud technology and why the telecoms sector needs changing

Published 03/01/2016 | 02:30

Shay Walsh by Paul Young
Shay Walsh by Paul Young

Shay Walsh has politely removed his Christmas jumper for our interview - but there's no hiding the celebratory feeling in the air at BT's tinsel-strewn offices in Dundrum, south Dublin, where we met in late December.

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Staff in this office have more reason to celebrate than most this year; the company had a great 2015, with revenue up 14pc in the six months to the end of September.

Straight-talking Dubliner Walsh (46) took the managing director job at the Irish operation in October. Before that he headed up the company's all-island business sales unit, covering multinationals, smaller enterprises and government. He joined BT two decades ago, three years after graduating from DCU in electrical engineering, back when it was still Esat Telecom in the days before BT bought it up.

Despite its 3,000 Irish workers and hundreds of millions in revenue, a lot of people aren't aware that BT Ireland exists. One employee told me that when she first got a job at the company and informed her friends and family, everyone asked could she get them a discount; they presumed she meant Brown Thomas.

The taxi driver that brought me to the interview made the same mistake, telling me crossly that there was a Harvey Nichols in Dundrum but no BTs.

The brand left consumers' consciousness in 2009 with the sale of its retail business to Vodafone. Irish consumers now mainly associate it with football fan favourite BT Sports, the company's in-house, world-class UK sports channels. They will soon be able to enjoy super high definition, 4K premiership football, Walsh tells me, with rugby and other live sports to follow. (Interestingly, Setanta Sports currently has the right to broadcast BT Sport in Ireland - and Setanta has just been bought by Eir, meaning BT Ireland's biggest rival is currently advertising its brand day and night).

Despite its relative anonymity, the company plays a key role in the delivery of Irish telecommunications services, to everyone.

It has the second biggest network after dominant Eir, including more than 2,500km of fibre mostly routed along the country's rail network.

Its wholesale arm sells this infrastructure to almost every other telecoms company in the country - like Three, for whom BT builds and manages its entire 3G network.

This is growing all the time. The company will probably bid to provide rural parts of the country with high-speed broadband in the National Broadband Plan under a subsidised government scheme.

The scheme will guarantee minimum speeds to every home and business in the country, regardless of location.

At least six other telecoms firms have expressed an interest along with BT - Eir, Siro (the joint venture between Vodafone and the ESB), Sean Bolger's Imagine, eNet, the French telecoms firm Bouyges and Gigabit Fibre, a new company set up by former Vodafone, Eircom (now Eir) and O2 executives to tender for the NBP.

"I think the fact that our core network is so extensive, we would see ourselves playing a role in it somewhere," says Walsh.

"We have substantial infrastructure that has huge capacity and we do significant business with government - for example we deliver the 999 service and we have lots of other government contracts, with the Department of Foreign Affairs, with the Department of Justice.

"So we have a track record of delivering to government, and a significant backbone network. It would be logical for us to be engaged in the plan, when it become evident what it looks like."

Other retail customers include Bank of Ireland, EMC, Grafton, Airtricity, Bank of Scotland (Ireland), Bristol Myers Squibb and Ryanair.

The business aims to be a one-stop-shop for business telecommunications needs, Walsh says.

Where BT doesn't own the right solution for the client, it uses partners like HP, Microsoft and Cisco.

"We have a partner network that is very important to our success, companies like HP, Microsoft and Cisco.

"What makes us unique is that we are able to sit down with a customer and understand what they need as opposed to what they want. A customer will come to us and say they want to do X. And we will stop them and ask why they want to do that, what's the aim. We very often find it is not the way to go; maybe they should be going for a cloud service or whatever.

"We can only do that because we have no vested interested in any particular brand. We look at the needs of our customers and then tailor a solution. We deal very straight with everybody; we will walk into one customer and based on their needs will recommend HP, and walk into another and say EMC, another Dell.

"We consider ourselves trusted advisors. We can step back and make an independent assessment and prescribe the correct solution to the customer."

The big challenge businesses are grappling with from a telecommunications perspective at the moment is the move from legacy information and communications technology into the cloud, Walsh says.

In recent research by Amarach, seven out of ten company IT leaders said they were struggling to keep up with that process. BT can step in to help.

"What we're doing is facilitating customers to pick and choose between all categories of cloud services, for every service that you would consume in an ICT environment. Everything from your telephone calls to how you store data to how you run your business, whether that be email or whatever."

To do this it has a vast data centre in Dublin's Citywest campus, one of the longest-established data centres in the country.

Ireland is emerging as a global hub for data centres; the country's mild temperatures mean they don't cost much to cool, plus they are also viewed more favourably by government and the public than in much of the rest of Europe, where many perceive them as energy guzzlers.

It also shares data centre capabilities with Microsoft and Amazon. There are no immediate plans to build another one, Walsh says.

"We have sufficient capacity for the foreseeable future. What we are seeing as a trend when it comes to cloud services is that the size of the data centre in terms of square footage isn't as critical as it was ten years ago, when you had large, long racks of huge supercomputers. The trend now is that the footprint is getting smaller, you are getting more and more computer capacity in a smaller footprint.

"Size of data centre isn't as linked to the number of customers you can get into it as it was ten or even five years ago. We can deliver more and more cloud services with a smaller and smaller footprint."

The Irish business serves several large multinationals' entire global telecoms systems.

"We have focused on that as a strategy for the last year now and it is certainly showing signs that it is delivering.

"In the six months to the end of September we had 14pc revenue growth in the Republic of Ireland, 4pc profit growth. Look at how the economy is being driven by multinationals, the Googles, the Apples, the Facebooks, all these organisations are driving the economy and expanding all the time. We are serving those multinational customers."

BT in Ireland uniquely offers customers both a big domestic network and a vast global network, serving over 200 countries, he says.

"We are unique in Ireland in that we have a very substantial domestic network as well as being part of a global network.

"There isn't anyone else like that. If you think of other big, global networks like Verizon or AT&T, they have a tiny presence here in Ireland. We have a substantial domestic network and a substantial global network.

The result is the Irish business has emerged as one of the strongest-performing in the group.

"We are certainly one of the shining lights in the BT group at the moment. We are proud of that. BT is a very large organisation but every part of the organisation has to pull its weight. With our current financial performance we are certainly out in the lead."

But it's not all positive. BT Ireland, along with others like Vodafone, is currently embroiled in a dispute with market dominant Eir and regulator ComReg over practices at Eir - identified by an internal audit known as the Stiles report - that BT says denies it a level playing field.

It relies heavily on Eir's network to connect many of its customers. Eir is meant to treat BT and others as if they were normal customers, rather than competitors, and not give preferential treatment to its own retail arm. But Eir admitted in the Stiles report that it often put them at a disadvantage.

Walsh cites access to information databases as an example and even the time at which Eir's retail repair customer service line opens up every morning - 8am, half an hour earlier than the wholesale repair customer service line.

BT wants these practices remedied as soon as possible. It has not ruled out taking legal action, Walsh says.

"The Stiles report is dominating the agenda at the moment. If Eir delivers remedies to all of the issues identified in the Stiles report that will make a significant difference to our business because all of our downstream customers, the consumer customers of our wholesale partners, are the ones who are suffering.

"I'll go toe-to-toe with any competitor as long as the playing pitch is level; I have a big problem when it's not.

Ultimately he wants Ireland to replicate the tighter regulatory system policed in the UK.

"If you look at how BT in the UK operates, we have functional separation and equivalence.

"What that means is that BT's consumer side of the house gets equal access to our wholesale arm, which is called OpenReach. We get the same access and go through the same systems as Vodafone do, as Sky do. We are all on the same footing, a level playing pitch. There isn't any functional separation and equivalence here, so we need progress on that.

"Although Openreach is a part of the BT group, we do not and cannot get access to it in any preferential way over our competitors. It's completely transparent and every single employee is trained - mandatory training - to ensure that they understand what is allowable behaviour.

"So if I was to ring an Openreach engineer and say 'listen, do me a favour, I've a customer in Newcastle and they are screaming at me here in Dublin, is there any chance you could get out and fix it quickly' - that would be a gross misconduct offence at BT.

"There isn't functional separation and equivalence in Ireland. That is what we have been pressing for.

"Ultimately we all want the same access, that we all go through the same front door. At the moment there is a different door for Eir than there is for anybody else."

"Measure twice, cut once"

Are you a spender or a saver?

"A bit of both, but the balance would be towards spending."

What is the best trip you took recently?

"I'm just back from New York with my family which was their first time there and we had a ball."

What are your main interest outside of work?

"Supporting the Dubs from Hill 16 and cycling with the BT Wheelers."

What is the best piece of advice you have ever gotten?

"Measure twice, cut once."

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