BT has announced a new phase of investments into the "rapidly" growing economies of Asia Pacific, Turkey, the Middle East and Africa (AMEA) in a bid to accelerate its expansion into high growth markets.
The UK-headquartered group did not disclose the total investment amount, but says it will be carved out of the around $600 million (R6 billion) the group's global services unit invests each year.
It aims to focus on growth opportunities in Australia, China, Hong Kong, India, Japan, Indonesia, Malaysia, Singapore, South Africa, the United Arab Emirates and Turkey. As part of its investment, BT will hire 400 people, 300 of which will be in emerging markets.
Kevin Taylor, AMEA president, says BT has a simple plan for growth in the region and is investing in people, services, infrastructure and products. "It's amazing to see growth in these emerging markets."
Bulking up
BT will invest in five new IP and Ethernet points of presence starting with India and Turkey, four network-to-network interfaces with the first in Indonesia, and two new satellite hubs in South Africa.
The group also aims to grow its portfolio in the security, cloud, unified communications, mobility and contact centre areas. It will also place field engineers on the ground in India, Singapore, Hong Kong, China, Japan, Turkey, Indonesia and South Africa.
BT says "by hiring more people in the region, launching more competitive capabilities across a larger number of countries and delivering a differentiated service experience, BT will be in a strong position to capture opportunities in a total AMEA market evaluated at around £32 billion [R534 billion]".
Taylor says the AMEA region, which BT now treats as one area as it sees it as a new "super" trade area, is expected to generate 47% of the world's economy by 2025. The new phase of investment follows its 2012 investment in Turkey, the Middle East and Africa, which came two years after it invested in the Asia Pacific region.
BT Global Services CEO Luis Alvarez says: "In 2010, we launched our first phase of investments to accelerate our expansion in Asia Pacific. This has allowed us to generate strong growth in the region and to nearly triple the number of new Asia Pacific customers signing with us."
The company is active in more than 170 countries and has 89 000 employees across the globe, 3 300 of which are in Asia, the Middle East and Africa. It has been active in this region since the 1980s and has more than 1 100 customers, which it serves through 22 offices.
Staffing up
The telco has been operating in sub-Saharan Africa for more than 21 years, and has legal entities in 32 of Africa's 53 countries. It has three regional offices and network POPs in Johannesburg, Cape Town and Durban.
In February 2012, it announced an investment into an international routing facility at the Melkbostrand, as well as FibreCo's network connection between Cape Town and Johannesburg. Keith Matthews, GM for sub-Saharan Africa, says the connection will go live in the middle of next month and it already has customers lined up.
Locally, BT has 170 staff and it will recruit another 30. It is also building points of presence in Durban and Johannesburg and, by the end of the first quarter of 2014, it will have built a public cloud, says Matthews.
He notes it is also launching services targeting sectors such as logistics, financial services, health and consumer packaging. The group, which is 30% empowered through Sekunjalo's stake, has also been working on its empowerment scorecard to be able to target government, he adds.
Revenue push
CEO Gavin Patterson says the group aims to secure the future of the business through profitable revenue growth and is funding its investment through the cash its operations generate, while at the same time paying down debt.
In its second quarter, its revenue was flat at £4.5 billion (R74.3 billion), although its UK-focused investments into television and sport offerings dropped its earnings before interest, tax, depreciation and amortisation 4% to £1.4 billion (R23 billion). Patterson notes it paid debt down by almost £1 billion (R16 billion), to £8 billion (R132 billion). "The strategy is working."
Patterson says half of its revenue is earned outside of the UK, and this contribution will grow in future. BT's consumer presence is limited to the UK, and in South Africa it competes in the business space against companies such as Telkom and Dimension Data.
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