LONDON – Carriers World 2004 – U.K. incumbent carrier BT Group plc (NYSE: BTY; London: BTA) is in the "advanced stage" of choosing the vendors that will help it build its next-generation 21st Century Network (21CN), but the shortlisted systems suppliers are finding it hard to meet the carrier's requirements for openness and flexibility, according to the man in charge of 21CN, Paul Reynolds (see BT Moves Ahead With Mega Project).

Talking at the Carriers World 2004 conference today, Reynolds, CEO of BT Wholesale, says that, while 70 shortlisted vendors, reduced from the original 300, were responding well in creating partnerships that could deliver integrated solutions, the major challenge was getting equipment firms to embrace a truly open approach to source code and APIs.

"We're challenging the old vendor model of inflexibility, and that's proving a major hurdle. But I'm going to be uncompromising about this. It's an enormous temptation for the vendors to hunker down and rely on their old proprietary technologies that will likely bring them revenue for a few more years. But we're demanding openness. That's the only way to be successful with BT and probably with other operators, too," said Reynolds. "We simply can't go forward with the closed models of the past."

The rewards for those that can adapt are potentially enormous. BT is to spend up to, but not more than, £3 billion (US$5.4 billion) a year on capex as it builds the new network with a view to closing down its existing infrastructure. "We aim to be the first telco to switch off the PSTN. Why? Because the PSTN impedes our flexibility, and our operational costs won't go down until we've switched that PSTN off. Once we've migrated to the new network, we'll save £1 billion [$1.8 billion] a year in opex."

But not everyone is in tune with BT's vision of replacing hundreds of thousands of network elements with a handful of core routers and several hundred multiservice access nodes. Reynolds said that when BT delivered its vision of the 21CN, he got a wide mix of reactions: "People are excited, skeptical, and scared."

While the technical challenge to BT and its suppliers is "hugely complex," it's not the major issue, according to Reynolds. "The challenges we face are regulatory, with the business case, and human. We need to have everyone on board with us on this – policy makers, regulators, other carriers, the vendors, and our customers. We have some customers that rely on the PSTN for their business, and we need to create a shared vision and a business plan to migrate them over to the 21CN."

To that end, Reynolds said, BT has launched what it has dubbed "Consult 21," a process of "open and proactive consultation with the industry and our major customers." Another layer of bureacracy, in other words.

While the carrier is open to suggestions about how it can make its transition to its new network, which has already begun in the form of service trials in three locations (see BT Trials IP Network and Vendors Detail Gear in BT VOIP Trials), Reynolds insists it won't be dissuaded from its overall plan to have nearly all of its customers moved over to the new network by 2009. "We can't stand still. [BT] must invest and innovate, or we'll die."

— Ray Le Maistre, International News Editor, Light Reading