Overhauling corporate networks

You could argue that convergence is a business buzzword that has promised so much in the past but all too often failed to deliver. However, those days look to be coming to an end with converged networks at last improving business efficiencies and slashing costs. “For 25 years we have been talking about the possibility of having one network platform that runs multiple services, but I think convergence is finally here,” an amiable Evans suggests during a relaxed chat at Cable&Wireless’ head office in Bracknell, England. At the time of CXO’s meeting, Evans, who is in charge of network operations, is busy launching the company’s next generation of network. The Multi Service Platform (MSP), as it is known, allows C&W to operate high-bandwidth services for customers at a reduced cost, which is especially crucial for businesses today with the multitude of communication tools at their disposal and belts being tightened.

“This [MSP] is very important because for the first time we really can offer data services, video services and telephony services all on the same network platform,” Evans explains. “The big sell for customers is that it gives more innovation in the services we can offer over a single pipe going into their premises. It’s cost effective and very reliable.” He continues: “We are a mission-critical part of our customers’ infrastructures so that means we have to make sure that we offer reliable services. MSP helps us to do that.”

MSP has been successfully introduced in the UK and geographic expansion, as Evans puts it, is well underway. “We’ve just launched three nodes in India on the back of our India licence; we’ve just launched three in the Middle East and we are halfway through rolling this out into our Asian network.”

Although around 75% of the company’s business is generated from the UK market, C&W EAU’stentacles stretch around the globe – from New York to Hong Kong and anywhere in between. In Britain, the organization is No. 2 in the food chain behind the telecoms behemoth that is BT but C&W is a business making great strides, with EBITDA (which is earnings before interest, tax, depreciation and amortisation) for year end March 2008 up 160% to €277 million. “We are also starting to look forward to single digit revenue growth,” he announces. “The problem of cash burn from two or three years ago has been fixed and we can now be on the front foot with our new products and services for our customers.”

Every little helps

One of these all-important customers is Tesco. In May, the supermarket giant and C&W put pen to paper on a five-year deal worth around €125 million to build a voice and data network to connect the retailer’s sites. C&W beat off strong competition from 14 competitors to land the deal, which is forecast to save Tesco a whopping €12.5 million in voice and data call costs. Evans’ department will connect more than 1800 Tesco sites, including stores, regional offices and distribution centres. Of course, Tesco is a global business so C&W will also connect the network directly with operations in 14 separate countries, including China, the United States, Turkey and Japan, to name a few. Thanks to the MSP, the network will have 40 times the capacity of Tesco’s current network and link up more than 400,000 staff.

But it doesn’t stop there; C&W is also installing the UK’s very first operational pico-cell base stations as part of its Fixed Mobile Convergence (FMC) project, which will allow Tesco staff to use their mobile phones to make mobile calls over a private GSM network which Cable&Wireless will operate within Tesco offices and sites – Tesco staff will use a mobile phone which effectively becomes an extension of the fixed line phone in the office and seamlessly roams on to a national mobile network when outside of the private in-building GSM network. “We are very excited about this because it is a very innovative proposition and a very innovative business model,” Evans enthuses. “And because the technology is absolutely mature and standard, we’re not taking a technology risk.” Evans describes Tesco’s response to the whole deal as “fantastic”. He adds: “Tesco publicly said that the convergence proposition was one of the key reasons why they selected us as a supplier for all of their estate.”

This project goes live in September and will provide a springboard as C&W goes after large corporate clients. Feedback from potential customers has been positive too. Evans notes how if the executive speaks the language of technology then he or she is even more inclined to see the benefits. “If you think about it, the sell to a corporate CIO is pretty straight forward; you can say ‘look, you no longer need those lines anymore because the call quality is now good enough’ with this.” Another key client, Aviva – the world’s fifth largest insurance group and C&W’s biggest customer – recently agreed a six-year, €380 million contract. The deal is an extension of an ongoing 12-year partnership between the two firms. C&W provides a total of 72 separate services, including voice telephony, local and wide area networks (IP-VPN and MPLS) for 35,000 Aviva employees based in the UK and India. It will also introduce IP telephony and IP contact centres, managed Blackberry services and advanced speech recognition technology. In terms of numbers, the network will be made up of more than 1000 sites with 57,000 individual telephone points and 74,000 data points. Aviva is looking to slash IT costs by around €42 million by the end of the year and the bulk of this saving will come from the switch to IP telephony.

The agreement with Aviva is a single-source deal, Evans remarks. “Aviva trust us to run those mission-critical applications. However, they want high service level guarantees and this is where I see risk management as playing a part in network operations.” Aviva’s willingness to let one company handle its entire telecoms estate is a new trend, says Evans. “Three or four years ago, we found that most companies dual-sourced because they didn’t really trust one company to do a good job but now some of the large companies are willing to single-source their telecoms.”

He says this trust never previously existed because service levels were just not up to scratch. “Customers want the basics to work very well and the network to not often break; when it does, they want it fixed quickly. They want you to provide capacity when you say you will provide it. If you get these basics right, customers will come back to you and they are more likely to give you a higher proportion of their estate.” Evans strongly believes that putting the customers’ needs above everything else will reap dividends. “At C&W we try to make service the heart of our strategy. We are getting traction with service level strategy which is why companies like Aviva and Tesco are now giving us single-source deals.”

When things do go wrong, putting it right quickly and efficiently is crucial. C&W has processes in place so that if a network problem crops up, senior management within the business are quickly alerted by SMS so that they can contact the customers affected to explain the problem and what is being done to rectify it. Evans gives an example to illustrate the point: “A few weeks ago someone dug up some fibre optics going into a call centre of one of our banking customers. Within half an hour I was alerted to what had happened and was talking to the CIO to explain the situation and how we were going to fix it. I find that customers like that we are very proactive – it means a lot to them.”

As well as being on the front foot when responding to a crisis, C&W’s long-established reputation also stands it in good stead when vying for contacts and forging relationships. “I think the fact that we have been in business for significantly more than 100 years and are well known internationally does give us an edge in negotiating deals and getting into new markets. Mostly everybody has heard of and has a lot of respect for Cable&Wireless.”

Image is everything

During Evans’ chat with CXO he gives examples of how C&W’s network offers other opportunities for companies to work smarter. For example, it is boosting digital signage efforts for retailers. For the uninitiated, this is advertising on steroids, if you like. Instead of static signs plonked around a store, flat screens flash up moving images of products on offer and special deals. This gives retailers the ability to dynamically download video over the network from a central point where it was authored. “Previously, retailers had to post a DVD to each store and run it on a DVD player – that’s all very well but its very slow. It means that you cannot do real-time updates and some managers forget to put a new DVD in the machine.” Evans continues: “So you have a much more efficient way of getting that information into the store; it’s much more reliable, it’s a lower cost and enables you to do promotions regionally or nationally with a very short lead time.” As well as signage, C&W is allowing businesses to keep an eye on their property with IP CCTV. Video surveillance is streamed over the network and data is stored centrally; time to throw out those boxes of CCTV tapes.  

The bottom line

These network capabilities are a welcome bonus but for most companies cutting costs is top of the agenda, especially with the economic slowdown we are experiencing. It’s no different for Evans and C&W. Indeed, Evans has cut his operational cost base by 10 percent since his arrival nine months ago. “A major challenge for us is running our network in more efficient ways and we have made some major gains. However, we are not resting on our laurels and are always looking for ways to run the networks and services more efficiently so that we can do more for less money.”

So does Evans have any personal goals for the next year or so? He wastes little time responding: “I want to get Cable&Wireless back into the wireless business in a meaningful way through the Fixed Mobile Convergence Project.

Another goal for me is to enable network operations to become a very efficient, high-performing organization, while getting the MSP rolled out abroad is high on C&W’s agenda. I think we have the potential to achieve these goals,” he concludes.

As CTO, Andy Evans manages Cable&Wireless’ technology cost base and leveraging the NGN platform to offer advanced services to customers. He is responsible for network infrastructure and strategy, technology platforms, IT and security. Evans has worked in the telecommunications industry for over 25 years, and was previously Chief Technology and Information Officer at Marconi, Commercial Director of Flag Telecom and has worked for other leading companies. He has an MBA from Harvard Business School.

Extra information…

Green is clean

Evans says C&W takes its carbon emission reduction efforts very seriously, especially when it comes to electricity consumption. Indeed, half of the company’s €38 million a year electricity bill can be put down to air conditioning in technical and switch sites. “We are rolling out air conditioning improvements because anything that we can do to improve air conditioning efficiency, directly benefits us through reduced electricity costs and reduced carbon emissions,” he states. C&W is also just signed up to the STOR (Short Term Operating Reserve) scheme run by the National Grid in the UK to conserve power. Evans explains: “If the National Grid sees a peak in power then they call us and other companies and request that we self-generate for a couple of hours instead of them having to start up another power station.” This initiative started at C&W’s top six technical sites a few months ago but plans are in the pipeline to expand it to other centres in the next six months. “I would say that we are doing a lot when it comes to green issues, particularly electricity consumption, and this issue is clearly going to intensify. Energy costs keep rising so this will continue to put economic pressures on companies while carbon trading will extend to businesses like C&W within the next two years.”

Fact file

Cable&Wireless operates through two standalone business units – International and Europe, Asia and US. The International business unit operates integrated telecommunications companies in 33 countries offering mobile, broadband, domestic and international fixed line services to residential and business customers, with principal operations in the Caribbean, Panama, Macau, Monaco and the Channel Islands.

The Europe, Asia & US business unit provides enterprise and carrier solutions to the largest users of telecoms services across the UK, US, continental Europe and Asia – and wholesale broadband services in the UK.