Communication services provider boosting hiring, investment in Asia-Pacific

BT Group Plc has turned to China and other emerging markets for new revenue drivers amid troubles in its home markets in Europe.

BT's corporate customers in Spain and Italy, two crisis-hit economies in Europe, are delaying transaction decisions as they become more risk-averse, said Jeff Kelly, chief executive officer of BT's global services business unit.

"They (corporate customers) are taking much longer to make decisions," Kelly told China Daily at BT's Asia Pacific Influencer Summit in Hong Kong, which was held last week.

BT is Europe's largest telecom services wholesaler by revenue and a leading managed networked IT services provider.

It is also the second-biggest communication services provider in both Spain and Italy, according to Kelly.

The company employs about 1,000 people and serves more than 200,000 business customers in Italy, figures from BT's website show.

In addition, in the United Kingdom, the home market of BT, Kelly said it could be "difficult" in general in the public-sector business this year.

The economic turmoil in Europe has driven BT to step up the pace in exploring high-growth emerging markets, such as the Asia-Pacific region and Latin America, Kelly said. Furthermore, Europe is a mature market for BT since it already has "such a large presence" there, he added.

BT announced an investment plan in September 2010 that will allow it to rapidly expand its Asia-Pacific businesses, followed by similar plans for Latin America in October last year and Turkey, the Middle East and Africa earlier this year.

The aggregate revenue in those three emerging markets rose 16 percent in the fiscal year that ended in March, while the total contract value increased 60 percent.

"I am very encouraged with those investments (in emerging markets) so far," said Kelly. He forecast revenue would continue growing at a double-digit rate.

BT's plans are on track, halfway through its three-year growth plan for the Asia-Pacific, Kevin Taylor, BT Asia-Pacific president, said during the same event.

The company added 300 new employees in the region earlier this year, including local leadership and additional professional services staff members. The total headcount in the region has surpassed 2,500.

BT entered the Chinese market in 1985, through the establishment of offices in Hong Kong. It targets multinational corporations with a presence in China and Chinese companies with operations across or outside the country, Taylor said.

The health, finance and retail industries are BT's major focuses in China. Companies such as Industrial and Commercial Bank of China Ltd, Air China Ltd and Midea Group have already partnered with BT in operating their business overseas, said Eliza Kwok, managing director of BT China.

BT also launched what it called a "Retail in a Box" solution during the summit, to help global retailers address their rapid expansion and service needs in the Chinese market.

Because of China's urbanization, a growing middle class and expectations that it will soon become the world's top market for luxury goods soon, "global retailers need to put a foot in China very quickly", said Kwok.

"The solution provides global retailers with the opportunity to reach 1.3 billion potential new customers and expand further into China's second- and third-tier cities," she added.

Vincent Fu, principal analyst of communications service provider market at Gartner Inc, said BT holds a leading position in the managed networked IT service market in China, if compared with other international rivals such as AT&T, Telefonica and Orange Business Services.

"However, one of the biggest challenges for BT in China comes from some telecom regulations," Fu pointed out.

The Chinese government does not grant foreign operators full telecom licenses, so overseas companies such as BT must partner with China Unicom and China Telecom in order to get local network resources.

"We'd love to see China ... allow international companies to sell telecoms directly," said Taylor.

shenjingting@chinadaily.com.cn