Doubts no deterrent to BT on big IP switch

Under the 21st Century Network (21CN) project, announced back in June, BT will ditch its existing PSTN equipment and replace a complex web of interconnecting legacy technologies with a single IP network by 2009.

No incumbent telco has attempted a transformation of this size before, and some experts worry that BT may be overreaching.

"The concept is good, but they're getting people too excited too early," Bert Whyte, chief executive of broadband equipment vendor Net.com, told journalists.

BT is aiming to start migrating customers from PSTN onto voice-over-IP in 2007. Whyte is concerned that BT may get too far ahead of itself as it tries to implement such a large-scale VoIP deployment and build a new framework for broadband services.

"BT are ahead of the curve compared to other companies, but the problem with being a pioneer is that you get arrows in the back," said Whyte. "BT is getting the market too excited."

Tom Rowbotham, venture partner at venture capitalist firm Vesbridge Ventures, believes that 21CN is "academically exactly right" for BT, but points out that it is a very difficult challenge.

"Every piece of kit you bring in is from a new supplier, and comes with its own problems," Rowbotham said earlier this month.

"The trick is to get the pace right at the start of the project so that it's slow enough for BT to find the bugs and drive them out."

"And once you have started to roll out the new equipment there'll be a point when you need go like hell and finish the job, even if it hits the share price, because there will be a day when maintaining the old kit will be very expensive," said Rowbotham, who was previously a director of technology for BT.

Matt Beal, BT's director of 21st Century Network implementation and strategy, doesn't deny that there are some concerns in the industry about the project.

"We’re quite aware of that feeling, and we're doing a lot of double checking and self-evaluation," Beal told ZDNet UK.

He insists, though, that BT has a firm grip on the risks and is learning from previous projects.

"The various building blocks of the 21st Century Network are working in other networks, and working well," Beal said.

BT has told the City that building the 21st century network will take up most of its £3bn annual budget for capital expenditure between 2004 and 2009.

According to Rowbotham, BT could come unstuck if the companies who aren't chosen as suppliers for 21CN come out with products with more advanced technology, features and functions than the suppliers it does pick.

"Once investment has been made it is hard to throw the kit away, you just have to upgrade it," Rowbotham explained.

BT is currently running a test programme of various IP-enabled hardware and software that could power the 21CN. It has ordered all the companies involved not to talk to the media, making it very hard for independent analysts to predict how future-proof the project will be.

Beal is adamant that BT is doing everything possible to avoid backing the wrong horse, supplier-wise.

"We have five-year roadmaps from our potential suppliers. We asked for ten-year roadmaps, but no-one had them," said Beal.

"There's a low risk of having to throw out all the kit," he added

On the upside, BT must be expecting to drive some very hard bargains from its suppliers, in return for the prestige and kudos of being chosen for such a big project.

"Everyone who is chosen to take part in the project can then go to their peers and other companies and say that they are the only people who are doing this on a real scale," said Beal.

And while BT accepts that people will look at the scale of 21CN and doubt that it can be carried off without problems, the telco thinks that some of the criticism is less than unbiased.

"It's not just traditional competitors but also the competitors of those companies who are doing well through the project [who are voicing doubts]," said Beal, who suggested that venture capitalists in particular could be concerned if they've backed a company in the IP space who isn't likely to take part in 21CN.