30 July 2017
Just before boarding the plane to fly back to Manchester, I received a call from the BBC to see if I could pop in to speak about an embargoed story when I landed.
The story was about an announcement the government are making that BT are going to invest between £450m and £600m into their network to boost broadband and guarantee that every house and business gets a minimum of 10Mb. Oo!
Hardly a revelation. Their board of directors might want to travel the world and experience other countries connectivity.
The embargo was for 12 o’clock Saturday night, which seems a funny time for a press announcement. There is also a rather large gap in the two numbers. It doesn’t look like a well thought out, strategic plan; more of a publicity stunt or knee-jerk reaction to something.
Reading BT the lines
When you look at the numbers, on the outset they look huge don’t they? £450million, it’s a lot of money, but when you consider BT’s figures for 2016/17 – their turnover was £24bn with EBITDA of £7.6bn. Yes, these are billions!
From my understanding and experience, a technology business should be investing a minimum of 10-20% of its profits in to its infrastructure every year. Even the more inflated of the two numbers that BT is announcing falls well below even 10%.
When you consider these should really be every year, if you look at BT’s numbers over the last decade, with a broad brush, they turned over in excess of £150bn with profits of over £50bn. The numbers that BT are promising the government for broadband are absolutely pathetic. The investment stands at less than 1%.
If you have ever wondered why we have one of the worst broadband connections in the world everyone, it’s because of this diabolical business model that makes millions for shareholders and the City, but delivers the worst customer experience I personally have ever witnessed in the history of the internet.
Reading the full press release ahead of my discussion on the radio, it looks like this is a reaction to the government threatening to put serious regulations against BT forcing them to up their game. This explains the odd timing of the release.
I am not in the habit of slating businesses, I know how hard it is to run them and no business is perfect, not ours, I don’t think they exist.
However, BT is not a business like any ordinary business. It holds a huge monopoly and prevents great businesses like Virgin Media and a plethora of small businesses trying to deliver value for money to the British public, by having to piggyback off the back of this corporate monolith.
It’s desperately sad, because if the great people of Britain had a choice, they’d have no customers.
People don’t queue up to do business with BT like they do Apple. It’s not their passion, style or legendary commitment to their customers why people queue up to use them. At the end of the day, they own the connections across the country and the lines in to your house.
It has to be one of the greatest examples of the worst privatisation models that has ever happened. When you look at who else is in that list of privatised organisations that is saying something. Why Thatcher didn’t include legislation to guarantee continuous improvement when privatising these companies, is beyond me.
Our Prime Minister is there to make a difference and she has the power to do just that. So Theresa, if you are reading this and I will be sending you a copy later, do the British public a favour and force BT to commit a whole lot more, not just as a one off, but every year like all of us other tech entrepreneurs have to.
This is how you create continuous improvements and eventually loyal and happy customers. If not, nationalise it then you will have billions every year towards the national debt.
If you have a story about BT good or bad, I’d love to hear it.
We paid for a dedicated leased line into our house for work. Not broadband, but an actual leased line. It was slower than the free broadband that came with our Sky subscription and cost tens of thousands of pounds.
Locked in a contract for 3 years, we never got anywhere trying to get BT to make the connection work.
Incidentally, do you remember years ago, the wifi on Virgin trains was brilliant. It was provided by Virgin Media Business back then. Richard Branson used to get Gail and I to message him, if the signal ever dropped so he knew exactly where it was so he could continuously improve it. Yep, the man at the top took a proactive interest in making this sort of difference. That’s why he is successful, as he commits to ensure all his customers benefit.
One day the service just became terrible. After a couple of journeys, I sent a polite email to Richard explaining that the service had deteriorated. He copied me into his email to the CEO of Virgin Trains asking what had changed. The answer came back, they’d moved to BT.
I am not sure he’ll make that mistake again! Just like me!Back to Blog