By Graeme Wearden, 28 April 2005 12:50
NEWS BT has chosen its preferred suppliers for a multi-billion pound upgrade of its UK infrastructure known as the 21st Century Network project (21CN).
Alcatel, Ciena, Cisco, Ericsson, Fujitsu, Huawei, Lucent and Siemens have all been selected to supply equipment and services that will allow BT to replace today's circuit-switched networks with a single IP-based network.
Paul Reynolds, BT Wholesale chief executive, said in a statement: "21CN is a key infrastructure that will fuel the UK economy and provide a flexible way for consumers to use new services. The selection of the preferred suppliers is an incredibly important building block towards that vision."
Some big names missed out, most notably Marconi whose share price plunged over 40 per cent following BT's announcement.
Marconi claimed this morning its product had "performed extremely well technically" but had been unable to meet BT's "commercial requirements".
The 21CN project is set to cost BT around £10bn over the next few years. BT is the first incumbent telco to embark on such an ambitious move. While this does mean BT must address the challenges inherent with being a first-mover, the upside is that it is in a strong position when negotiating contracts with vendors, as involvement in 21CN will be a valuable card to play when other telcos start upgrading their own networks.
Fujitsu and Huawei will supply the technology to link BT's existing voice and data networks with the new IP-based infrastructure. Alcatel, Cisco and Siemens will supply kit for the 'metro nodes', which will handle the routing and signalling functions for the unified 21CN network for voice, data and video traffic.
Cisco and Lucent will provide the core nodes - high capacity, large scale routers creating cost efficient connections between metro nodes. Cisco will deploy its CRS-1 router, which typically costs several hundred thousand pounds.
Ericsson will supply control systems for 21CN, while Ciena and Huawei will supply the optical electronics that will convert the signals carried at high capacity over the cables connecting the metro and core nodes.
Graeme Wearden writes for ZDNet UK
Comments
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1. anonymous
This is very bad news for Marconi and UK Plc. I believe there needs to an enquiry into why Marconi could not compete with the French, Germans etc and why the UK is not much more active in this hugely important sector.
On another message board today it was suggested that Marconi can’t compete with the prices quoted by French/and other overseas companies for BT contracts, because the French firms have guaranteed profitable work for France Telecom, who would never buy from other than French suppliers, and these suppliers are therefore able to quote loss making prices for BT work..
It would be interesting to have other views on this.....
2. roger brittain
Thanks for information in the article but where is the information about what they are actually going to do? Are they going to reinvent copper wires? Optical fibre? What will be the new technology?
3. anonymous
As an employee of a 'French' supplier I must disagree with the previous comment. It is the North American and Chinese suppliers who have won the largest amount of this business. Marconi will now be taken over by one of them as they do have good products but cannot compare on price.
4. J.L.Frydman
I think it is wrong for BT to exclude Marconi. BT should take a broader view. Job losses in Marconi will damage local economies as well as the UK as a whole, which is still BT's own main market. The skilled labour and professional pool in the UK telecomms industry will diminish which will also indirectly affect BT over time. Customer and shareholder goodwill will also be lost.
5. anonymous
There needs to be european community direction/directive on this unequal competition!
If french telco's are state backed, and are using this to compete against others which aren't state backed, then there's something wrong here!
If uk telco's continue have their customers turn their backs on them in the uk, will we then assume that our british network is in fact french, at the cost of killing british industry.
there needs to be a some form of equalisation. Otherwise, we'll be forced to accept this as the way the market leads us. Yikes!
6. anonymous
J.L.Frydman is wrong... BT shareholders couldn't care less who BT contracts with as long as it doesn't impact on their profitability and dividends. The idea that the City is pro-British is very naive. Some individual shareholders may be a bit peeved but BT won't take any notice. Also - most of BT's customers a) don't understand what C21 net is all about b) don't care and c) probably haven't heard of Marconi anyway. So - BT will get away with this scot free unless the Govt decides to take a look which they probably won't because they are frightened to death of looking as if they are even remotely industrially nationalistic.
7. anonymous
As a shareholder, I feel very strongly that British Telecom is not supporting British jobs. Another blow for the bleak midlands! from the international board!!
8. anonymous
You may not be aware but Fujitsu Telecommunications Europe Ltd who have been selected - design, develop and manufacture (yes manufacture included!) their BT 21CN equipment at their European headquarters in Birmingham.
So although this is indeed bad news for Marconi, the UK will still see a significant amount of this business. It does demonstrate a UK based company can still compete in the telecommunications market.
9. Anon
We can merely speculate the reason why Marconi didn't hit the mark with their tender. However just to answer comments regarding BT effecting the British market with jobs etc. by not taking on Marconi is very short sighted. If you really take a look at what BT is doing with 21CN you will see that when the roll out is final there will be a major issue with redundancies relating to the excess to requirements for actual Exchange/Network Engineers. If you look at the Netherlands and their roll out of a data IP enable network you can see exactly what the employment issues are likely to be. Some quotes that they have axed 1000 jobs plus on a monthly basis. 21CN has implications such as end users can action their own Broadband lines and more control with out the need for so many engineers. Trust me when 21CN is finished watch the surplus to requirements engineers and BT staff needing to find other jobs.
10. anonymous
21CN will definitely reduce the need for Network Engineers, which is one of the (many) reasons why BT is moving rapidly into the previously niche BT area of ICT services - to grow the revenue base still further and thus create jobs for reskilled Network Engineers
11. Stuart Lawson
I find it interesting that people think that BT cares about "goodwill". Since BT own the local loop and - let's face it - control most of the other bits anyway, why should they care about goodwill?
I have dealt with BT - both personally and professionaly - many times over the past 10 years and have never had a "satisfactory customer experience" to put it delicately. What I really think of them is probably libelous.
As to why Marconi could not compete with other organisations, I think one factor in it is the lack of subsidies given to UK companies by the UK Government. I believe this is one major factor why so much of the UK's industry - like shipbuilding, for example - has gone to the Far East and Europe.
12. anonymous
If working at Marconi is as bad as what I heard, I am not surprised that they failed to provide a satisfactory respone to the 21CN tender.
Pumping government money into a company which is not well managed is not going to resolve internal issues.