British Telecom's chief executive presented Esat Group's new brand - Esat BT - yesterday in Dublin and reiterated the need for BT's Irish subsidiary to make a profit by next March.
Mr Ben Verwaayen, who joined the British firm as chief executive in January, also outlined a strategy for BT which he described as "dull and boring" in an industry that was all about balance sheets, earnings per share and cash.
BT, which acquired the Esat Group for $2.5 billion (€2.5 billion) in February 2000, was not in the market to acquire distressed telecoms assets at present. Rather it would now focus on customers and its goal to deliver five million high-speed internet connections in the UK by 2006, he told The Irish Times in an interview yesterday in Dublin.
Mr Verwaayen, who was part of the management team at Dutch firm KPN in 1996 when it negotiated its strategic alliance with Eircom, confirmed BT Ignite had given all its operational units, including the Esat Group, the message they had to be earnings neutral by March 2003. This would not be possible unless all divisions were on target, he added.
"If you want to get the total in order, you've got to get the pieces in the box in order. That's the message."
This strategy has led to speculation that Esat would have to shut its consumer and small business division to curb group losses, which were €74 million in the last three months of 2001. But when asked if there would be any major change in the form of Esat, Mr Verwaayen said there wouldn't, and that BT was very happy with its opportunities here.
"I'm not interested at all in talking about failure. I'm interested in what we can do for customers," he said. "Esat has an opportunity in this market to outperform... It is a clear number two in the market with a role to play to keep a competitive market."
Mr Verwaayen said the Republic was a different market for BT because of history and the local circumstances - which meant it had consumer and SME divisions.
But it also had similarities in that it would soon be under EU regulation and had global reach. "Great management is able to recognise the benefits of what unites us and then looking to the specifics. Lousy management is looking to the specifics and ignoring what unites us. That's the challenge for local management," he said.
Mr Verwaayen said Esat had learnt that chasing all one million consumers in the Republic was a mistake that only built up debt. The logic of the market dictated that, in order to be profitable, firms needed to offer a value set to attract customers, he added.
Esat will also announce a variety of new bundled internet and voice services to customers as part of its re-branding campaign over the next few months.
Mr Verwaayen said the uncertainty surrounding WorldCom was not good for anyone in the telecoms market and there was a lot of nervousness among customers.
He would not comment on how much business BT had won from distressed firms such as KPNQwest and WorldCom over the past quarter. But the type of contracts that customers had with WorldCom did not happen overnight, added Mr Verwaayen.
"There is over-capacity in the market and there is fallout," he said. "It is a type of cold rationalisation process taking place where people are going out of business and assets are not being picked up, just evaporating."
Despite requesting information on the assets of troubled telecoms firm Global Crossing, which are due to be auctioned shortly, BT is not in the market to acquire distressed telecoms assets, he said.
"Distressed assets are distressed for a reason. So don't expect any major acquisition from BT of distressed assets. We don't have holes in the European network to fill."
Mr Verwaayen said BT had set a target of bringing high-speed internet connections to five million homes in Britain by 2006. By increasing the volume of connections BT would create a business opportunity for content providers and change the dynamic of the telecoms economy in the UK, he said.
