Indian telcos can become global players: BT chief

DAVOS: Sir Mike Rake has been coming to Davos for over 12 years, and good-naturedly grumbles that he’s not sure he likes it any more, his team makes him do things like waking up at “6 am and work.” He’s also chairman of British Telecom, one of the world’s largest telecom players and a rare-surviving British company. He spoke to ET at the BT office in Davos about the future of BT, Indian telecom, the state of the world, and more.

“India,” says Sir Mike, “is going mad on mobiles. But sooner or later it needs huge investment in infrastructure on the ground. We’ve found that because of the increased demand for capacity, people are moving back to fixed lines and fibre after a point. We saw this huge surge in mobile dongles, but after a while there are reliability issues, and the demand is for a fixed lines,” he says. It could be because he’s a fixed line man, but Sir Mike isn’t a fan of the mobile-replacing-everything school of thought. He sounds bullish about the future of India’s telecom industry.

“Of course, Indian telecom companies can become global competitors. It’s an exciting telecom industry, a massive domestic marketplace. We have 5000 people in India, and another 20,000 employed indirectly,” he says. “If we look over a five-year period, we see at least a 10-25% growth in India,” he says.

Outrpiced in the outsourcing market? “Every single country can be outpriced. Even in India, costs have escalated from what they used to be. So yes, you have to remain competitive through technology and value addition,” he says.

He happens to believe that India has some of the best centres of innovation, outsourcing and services, and is way ahead of China in innovative research. He should know, BT has its research spread out through research centres in UK, India, and Dalian in China. And technology and research is central to BT’s strategy — and Sir Mike says its strategy now is to execute, invest in its global services division, which has been through some hard times, and “give customers what they need and want, and invest in research and technology to keep pace,” with new technologies like cloud computing, virtualisation, things like that, and that naturally, is where India comes in.

What he’s not so confident about is the state of the rest of the world. “Last year we were sitting on the edge of a volcano, now we’re balanced at the bottom of the pit,” he says. But he foresees a very low return to growth.
Youth unemployment, he feels is one of the biggest challenges facing global business today, across the board. Ask him about the rise of protectionism, and we’ve touched a raw nerve. “It’s a political reality, it always happens. It damages the people it tries to protect the most, but..” In this debate, Sir Mike feels that BT is on the losers side. “In terms of access, everyone can access BTs networks in UK, but we suffer in terms of access in say, US, continental Europe.” And yes, India too. He strongly believes that UK’s open access policy is better for the market, and says that improves access to broadband, to knowledge, and networks.”