LRTV: We’re here with Paul Reynolds, Chief Executive of BT Wholesale. What are some of the things that BT’s talking about at the show this week?

Paul Reynolds: BT’s talking at the show about our 21st Century network strategy. That’s our plan to convert all of our networks and services to an IP network over the next five years.

LRTV: Excellent. You’ve been on record as saying that a lot of value has eroded from the telecom carrier space in the past decade. Why has that happened?

Paul Reynolds: Well every telco, every carrier in the business is cutting prices by a colossal amount, up to 10 percent per annum. You know just matching those price reductions to stand still in growth terms is a major task for all of us. So there’s a lot of challenge in our marketplace because of over-capacity. It’s showing through in the price cuts – value for the consumer, but it’s a difficult place in which to thrive.

LRTV: And how are BT Wholesale’s carrier customers able to differentiate the services that they provide?

Paul Reynolds: Well, BT wholesale has a very comprehensive set of network assets and services. So we can do the whole job. We can provide the circuit; we can manage the whole network for a mobile operator. So the value we can add is to take off of our customers the responsibility for managing networks and leave it to them to manage the customers.

LRTV: Let's get to a couple of your talking points. You’re speaking later today at the show. What do you plan to talk about?

Paul Reynolds: At the show I’m talking about our 21st Century network strategy. We’ve looked very hard at the opportunities to go forward – given convergence, the ability to to do the Web and mobile, through voice over broadband, and so forth. Convergence is gathering pace, and we believe that carriers have to embrace that change decisively and convert all of the networks and systems into all-IP infrastructure fast. I guess our byword is “You gotta invest or die.”

LRTV: Speaking of 21CN, what are the some of the choices that BT had when deciding to go ahead and pursue a 21CN build-out? And I ask that because, in the U.S., there are a lot of carriers like Qwest that have a very basic broadband strategy. And then there are carriers like Verizon that aren’t building an all-IP access network. So what why did BT make the choice that it did?

Paul Reynolds: Well BT made the choice we did because we looked at the marketplace. You know, services are cheaper, better, year upon year. There are hundreds of new operators entering our space and competing for attention from customers. Looking ahead over the next few years – in order to to survive and thrive in four or five years time we believe we need to have the ability to offer converged services from a single IP platform or else we’ll be out of business. And that means switching off the PSTN, switching off the legacy platforms, and switching on to IP as fast as we possibly can.

Two reasons for speed: One, those guys are coming after our business. We need to be able to compete on price and, you know, fleetness of foot. We have to get the old legacy systems out of our business, or else we’re bearing two costly structures and simply could not survive. So we have to go fast. And I don’t know that anybody else can have a different analysis of that market. BT, in going for this then, plank one was to make sure we had broadband available everywhere. As we speak today, something like 99 percent of households in the U.K. can already receive broadband if they want it. Just getting that and enabling infrastructure in places is absolutely vital.

LRTV: Is BT still confident that it can hit its deadline of decommissioning its TDM switches by 2010?

Paul Reynolds: We’re confident in that time frame. All the plans are built to that. We’ve had a step-back plan to 2010. We’re on track on it, and we picked vendors to build the network. We’ve already started installing kit, and we’ll be going to live deployment on a trial basis next year.

LRTV: And how difficult was it in choosing vendors for the 21CN? How difficult was it to choose Huawei over Marconi when BT was picking its suppliers?

Paul Reynolds: Well, what we did when looking at suppliers was – actually it was quite a long process. We took about a year to get relationships with every major supplier, every vendor in the world, to make sure we knew who all the guys were. We went to a tender process June 9th last year. We initially started with over 300 players participating in that; we gradually whittled it down, and we chose the the final few last month.

We had some very clear criteria throughout. One: Could these vendors meet the technical architecture that we had published? You know, we had kept the files and made sure the technology could do the business. And two: Did they have the operational capability to manufacture and support the installation of kit and deployment of kit in the U.K. in the timeframes that we wanted? And three: could they meet our commercial terms? And, crucially, those commercial terms were about whole-life cost. It’s not about buying a gray box dumped on the exchange floor anymore. It’s about the whole life of the capital and operating costs over a 10-year period.

So we looked at every vendor who was capable. We put a very clear set of criteria for decision. Winning was up for anybody who could meet those criteria, and we chose those that did the best job.

LRTV: Was there anything in particular that convinced you that Huawei had the the quality of products and the support necessary to be able to supply a carrier as large as BT?

Paul Reynolds: Well, we’ve been working with Huawei for two or three years now, and we are already deploying their kit in in a number of our networks. So we’ve built up an experience of their capability. They’re a good quality company like all the other vendors here, and we believe they can meet our commitments. But of course they will have to meet our commitments and our requirements over the next couple of years...

LRTV: Excellent. What are the opportunities that BT is seeing in North America?

Paul Reynolds: Well, North America’s a huge market. Over 50 percent of major multinationals are headquartered here, so you have to be here to do business. And to that end, BT has network nodes in over 25 major U.S. cities and over a thousand people on the ground. And we won some very big contracts recently – you know, building on a base in the airline industry, finance industry, and the U.S. government. We’ve recently taken the global business of Bristol-Myers Squibb and others.

So – a solid platform for growth. We’re seeing great growth in our outsourced networks. You know, we believe our strategy is as a manager of networks, and if we can do that it builds on our core strengths. And we’ve also have some fundamental capabilities in broadcasting and in conferencing.

LRTV: Because this show is mostly an equipment show, what type of technologies would BT like to see more of from equipment vendors?

Paul Reynolds: Well, you know, it’s becoming an IP world. That’s what 21st Century Network is all about. And for BT the criticality to that is that vendors can supply to an IP configuration carrier-class solutions. You know, the IP world’s come through the enterprise phase with, I guess, slightly less demanding standards of uptime and quality. And we need for the suppliers across the world to meet carrier-grade standards. And we’re seeing some significant movement in that.

LRTV: What are the primary applications that are driving 21CN?

Paul Reynolds: Well, 21CN is about the ability to offer converged services, bring services to the market that cut across the traditional space of data, voice, or Web-based services and video, much more swiftly than they can today. So it typically takes something like 18 months, maybe two years, for a carrier to engineer and deploy a converged service in the old stovepipe of legacy worlds. 21CN will bring that down to under six months and give us much more flexibility. An early example of that is something we’re coordinating called Project Bluephone, where we’re working today on the ability to do voice calls on a fixed network from a traditional mobile phone while at home, and roaming seamlessly onto the GSM mobile network when out of doors. That’s an early example of a converged service on a 21CN platform deployed rapidly.

LRTV: Tell me a little bit about Project Bluephone.

Paul Reynolds: Project bluephone is a program in conjunction with Vodafone, our strategic partner, where we aim to converge the fixed and mobile worlds. Customers will be able to make calls on the fixed network, voice over broadband, when in the home – over a home hub – but roam seamlessly onto the GSM network when out and about. It offers the advantages of low cost and high quality to the fixed network when at home and, obviously, the convenience of roaming and mobility when out and about. We think it’s a compelling proposition.

LRTV: Finally – is there even just a slightest slim chance that Scotland’s gonna qualify for the World Cup?

Paul Reynolds: Well, you know, Scots – and I’m no exception – are always optimists. So you know we’d go for more than qualifying, but to win.

LRTV: Oh, really [ha ha]. How important is video to the traditional telecom carrier business right now?

Paul Reynolds: Video is becoming increasingly important, I guess, to every major carrier. You know, we’re seeing customers, whether they be corporates or consumers, demanding video-based applications in increasing amounts. That’s driving the growth of higher bandwidths, for example, in VDSL networks. And it’s certainly driving us to build fatter, more capable, and speedier coordinated networks – and the ability to distribute content across those networks rapidly. And that’s a key part of the architecture and design of 21CN.

LRTV: Do you have any interest at all in seeing the Talking Heads get back together?

Paul Reynolds: Oh, well – I’m a Cold Play man, myself.