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No surprise as enterprising idea comes under attack

October 17, 2002

BT should rise to the challenge of a Scottish telecommunications trading exchange

 

THERE MAY BE LOTS of uncertainty around in the world today, but some things in life can be safely predicted.

 

Scottish Enterprise has just announced that it has appointed the experienced telecommunications trading exchange operator Band-X, to bring such an exchange to Scotland . This, coupled with a dedicated high bandwidth link, should bring the same competitive choice of telecoms suppliers to Scotland that exists south of the border.

 

Guess what? This development is now under attack. Any guesses by whom? Why, by BT, NTL, Thus and Telewest, of course, those companies being the current telecoms suppliers in Scotland.

 

Bob Downes, a BT Scotland director (and a former senior SE director) criticises the enterprise agency for spending its money in this way. He quotes BT’s price list to show that Scots companies are offered the same tariffs as elsewhere in the UK.

 

Ironically. Charlie Watt, the SE director behind the initiative, was formerly a director at BT. Having moved in the opposite direction to Mr Downes, he now finds himself on the other side of this argument.

 

He says that most Scottish companies currently have access to only one or, at most, two suppliers of telecommunications services, and that increased competition will inevitably benefit the customer.

 

‘Of course BT’s published price list is the same across the country,” says Mr Watt “BT’s quoted prices are regulated. What really matters is the actual price on the street, when many competitive suppliers are vying for business.”

 

And it’s not just a matter of price -the new telecommunications trading exchange will allow companies to switch between suppliers painlessly if they are unhappy with the service provided by their current supplier.

 

Mr Downes claims that SE should be concentrating on stimulating demand for broadband among the business community and not interfering in the marketplace.

Scotland is well behind the other regions of the UK and competitor nations in Europe in business adoption of broadband connectivity. But as the dominant supplier in the UK , surely BT should be admitting the lion’s share of the responsibility. Until Ben Verwaayen took over at BT, the company was quite lukewarm about promoting broadband in the UK , preferring to get involved in ambitious international investments, many of which have failed.

 

And as far as spending the taxpayer’s money on promotion is concerned, SE has been doing a fair bit - far more than BT in fact. SE runs an annual e-business promotion week with more than 200 events, and more than 5,000 companies have received advice from e-Business workshops. Competitions such as 'Winners on the Web', and new initiatives such as the Crieff powerline and satellite trials in several remote areas, push the benefits to a wider audience. Eight local demo areas have been set up, and 450 projects with individual companies are under way run by 45 independent business advisers.

 

And what has BT been doing? Well, it has recently been concentrating its public efforts on advertising and promoting its ADSL service, despite the fact that it is only available on a minority of Scottish exchanges. Even if you happen to be in an area served by an ADSL exchange, you have to be lucky enough to be based close to it, because BT is making little effort to upgrade cables to enhance the network provision.

 

Also, BT somewhat bizarrely promotes its 2Mb ADSL business service as being capable of supporting four computers, confusing potential businesses that have five or more. I’ve got news for these confused customers, don’t worry — BT doesn’t actually know how many computers you have attached to your internal network.

 

The attitude of BT seems to be a bit like parents with a truculent teenager: look at all this money we are spending on you - why don’t you appreciate us?

 

As the owner of the UK’s fixed network, BT should be concentrating on addressing the fact that only 14% of households in the UK have broadband, compared with 45% in Germany and 43% in Sweden . And that effort should start with offering services that people can understand and actually want.

 

In the meantime, BT should be confident enough to welcome Project Atlas. Given the uncertainties surrounding many of its competitors, it should be well placed to benefit from a larger, more demanding market.

 

Ian Ritchie is a director of Scottish Enterprise

 

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