Luis Alvarez discusses the enterprise market, not being obsessed with revenue decline, what’s going to be big in 2014 and getting to know the new CEO of BT Group.
It is a year since European Communications last interviewed Luis Alvarez, the CEO of BT Global Services, which deals with large multinational corporations.
When we last spoke, Alvarez had just assumed the role and said he saw a bright future ahead despite the tough economic conditions affecting many of his clients.
It has not been an easy first year, at least from a revenue perspective. For the 12 months up to the end of March this year, Global Services saw revenues decline eight percent and it fell again between April and June.
But sitting atop BT Tower in London this week, Alvarez said he his not overly concerned.
“We have slowed revenue decline but I am not obsessed with revenue growth. Rather I am focused on ensuring profit and cash are healthy,” he said.
BT as a whole has made a point of focusing on these two areas. Pre-tax profits of BT Group were up two percent for the 2012/13 financial year and it increased its dividend by 14 percent.
Order intake and operating profits at Global Services are on an upward curve, too – Alvarez cites deals with Fiat, Phillips, Unilever and BAT as examples – and the CEO sees positive signals in the overall economy.
“It is less bad in the EU today than it was a year ago. Companies are using technology to compete better, much better in fact. It is still challenging but I see some positive signals.
“Everyone wants more of what we sell. It’s not a lack of demand [that’s the problem] but we need to be able to match demand at right speed.”
As well as the challenges that market pressure is putting on prices, the CEO admits Global Services has much to improve on itself.
“Not being able to provide quality of service on a global level has been a lowlight of the last 12 months,” he admits.
The reason we are at BT Tower is because the operator is making “a big noise” about a new teleconferencing solution that Alvarez hopes will go some way to solving the quality problem.
BT has teamed up with Dolby Laboratories to launch an audio conferencing service that claims to be able to replicate the sound of face-to-face meetings thanks to features such as high fidelity audio and voice separation.
“It is a revolutionary concept. We want to make a big noise about it because the experience is so much better,” said Alvarez.
Customers want this, he added, citing the more than 10,000 trial conferences that the two companies have hosted.
The CEO says Ethernet, security – particularly how to protect assets from unknown threats – as well as cloud and virtualization will be the most important product areas for Global Services over the next 12 months.
However, he does not expect the acquisition of 4G LTE spectrum in the UK to create any major opportunities for his part of the BT empire. BT subsidiary Niche Spectrum Ventures paid €213 million for 2.6 GHz spectrum in the February auction “to complement a range of services using fixed and wireless broadband.”
But the CEO said: “There are no big announcements expected from us [regarding 4G LTE]. We will continue to evolve the portfolio.”
As Alvarez settles into his second year in charge, he is getting to know the new CEO of BT Group, Gavin Patterson, who took over last month.
“Gavin has started to travel a bit with me and meet our customers. He’s very good with customers. Having previously worked for P&G he understands how tech can be used,” he said.
“He has three obsessions: continuing to improve the service we offer; getting the right talent in the right places; and ensuring we benefit from any growth opportunities. There is no big change in strategy from [former CEO] Ian Livingstone.”