Planning for the future

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Today, the emerging markets are still important but we will focus on countries we have already invested in. Olivier Campenon, president EMEA at BT.

In a discussion with NME, Olivier Campenon, president EMEA at BT, opens up on the company's reaction to the current financial crisis and its plans for the Middle East.

How does the current situation affect BT globally and your business in the region?

First, this crisis does affect BT much as it affects any company all over the world. It impacts BT because of our customers who are now under tremendous pressure and are coming back to us and asking for cost reduction. They basically want us to do the same work for cheaper.

One of the challenges we face is making sure people can see beyond the crisis. I think it's always important to say, yes there is a crisis but it is not the first and not the last. Is it bigger than any of the others, no but it's different because the world has evolved. Will it last for one year or two years or three years, the reality is nobody knows. What we should remember is that the crisis will end.

So we need both to prepare for the worst as well as to prepare for the future. When I look at the Middle East and also Africa I think it's a very good region. We have been here for many years and the Middle East is a growing environment, especially during this crisis when the rest of the world is moving towards recession this is an area where we still have some room for growth.

I would say that now more than ever we are dedicated to this region and are making sure we continue our activities here.

In detail it means that for the first time in the market, customers are coming back and saying that we need to reduce cost. We cannot just give them a 10% reduction, which implies when you start looking at a cost reduction that you actually think through what you can do differently to make it more effective. There is a lot of work being done internally to look at the solutions that exist and see how we can do it differently.

Security has become a very expensive item and so rather than investing in this yourself, you can go to a partner like BT that has the capability to make some cost reductions for you.

What we will see during 2009 is a lot of thinking on how telecommunications can help transform companies.

In terms of network hubs in the ME are you going to continue adding connections or can we expect a postponement?

You should expect a slowdown in deployment. Within BT we have a very pragmatic approach. We go wherever the customers go and we grow where the customers want us to grow, and we invest once we have customers there. For the moment, as long we do not see a need we do not go there.

Some of the things we planned a year ago have kept going and some have been slowed down to match demand. The way it works is that we have a budget for expansion but we have to make sure that the budget is adapted to what we see. Obviously what we have seen over the past six months is a decceleration of the demand and so we are actually slowing it down.

Investment scenario - are plans going to go on schedule, or is BT planning on cutting back on investments here?

We had a budget of over US $50 million planned for investment over the next few years. Much of that has already been spent and implemented but some of the future spend and investments are being postponed because of this slow down in demand.

It does not mean that we are stopping or freezing investments. We just want it to be as close as possible to the demand and, hopefully, if it comes back at the end of 2009 we can then re-accelerate quickly.

Will we be seeing a hiring freeze or even some redundancies taking place at the regional level?

The answer is no. No firing. Freezing is not a word I like but obviously we are scrutinising anything we are doing today.

In terms of hiring people it is the same. We already have 180 people in the Middle East and I don't see an emergency to grow that except if you need a specific level of expertise here and there but it's rather stable and obviously we will look at how things evolve in the future.

What sort of reactions are you seeing from both your customers and partners when it comes to the current situation?

I would say it varies from one sector to another. We basically focus on five sectors. We have everything related to finance and that is an industry which is suffering here just like everywhere else. Then you have all of the logistics and transport sector, which are also suffering but not as much.

Obviously they are seeing the reduced business but my feeling today is that it is not as harsh as in the rest of the world. Then we are dealing with the telecom operators and they are suffering, but many in the region have a large consumer component and consumers keep calling.

I think the telecom sector is still a very active one. We see a very active role in working with these people especially in their own transformation and assisting their own evolution to a next generation network.

Then there is the government sector. It is very active at the moment, for instance we are working with the Abu Dhabi government. They see the need to log new services and BT plays a key role in this.

The fifth market which has radically slowed down is that of the smart cities. We have been doing quite a job in smart cities and this clearly now is a question market. Every month we hear something new concerning smart cities. There is great uncertainty in that domain.

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