...that it is also working with Cable & Wireless and hopes to launch a commercial service over its UK network in the first quarter of 2007.
Given the dreadful service provided by Cable & Wireless' Bulldog operation recently, such a deal might not be seen as a great idea. But Matthews insists otherwise.
"Cable & Wireless's problem was customer service. Now they're buying wholesale services from people who can do them, and concentrating on running their network," he explained.
He is more critical of BT and its ambitious 21st Century Network (21CN) project. 21CN is BT's attempt to rip out decades of legacy networks and replace them with a single, IP-only network. On paper, this sounds like the kind of project that Matthews would warmly support. However, he's most unimpressed that BT has been forced to push back the completion of the project by a year to 2011.
"I'm disappointed. You've got to question whether BT picked the right vendors," he says, pointing out that a multimedia network like 21CN needs to be quick enough to support the most bandwidth-heavy applications.
BT has kept very quiet about the causes of 21CN's delays. Indeed, the telco has been extremely reluctant to admit that the delays exist at all.
Matthews does have a small vested interest. If BT had chosen to take equipment from Marconi, then his Newport Networks would have benefited. Instead, BT shunned its fellow UK firm in favour of the likes of Cisco, Huawei and Ericsson. Newport has subsequently struggled to finalise a sale with another, unnamed, UK telco, and Matthews clearly fears that BT's 21CN struggles aren't helping.
"BT's delays take the pressure off everyone else," he warns, arguing that a year's delay to 21CN means rival operators needn't rush to sort out their own next-generation networks.
Matthews became "Sir Terry" in 2001, having picked up the OBE in 1994. In person, he's a warm, friendly character. But he reacts most indignantly to the suggestion that his working career began with Mitel, pointing to his apprenticeship with BT where, he insisted, he had been "making history" at its Goonhilly satellite operations.
Today, Matthews is a fully paid-up member of the establishment. He agrees with comments made by Eric Schmidt of Google who warned in October that politicians don't grasp technology issues, but Matthews believes politicians aren't solely to blame for their IT ignorance.
"A sea change is taking place, as we move from narrowband to broadband," said Matthews, comparing it to the move from canals to railways. "Look at DSLAMs (DSL Access Multiplexer). They cost $1,000 per port four years ago, now they're being offered for $9 a port."
No politician, unschooled in IT, can be expected to keep up with such technology changes and map the nation's destiny, Matthews argues.
But, as one who moves in these exalted circles at times, he claims to understand how to deal with politicians tech shortcomings.
"You talk to them like this," he explained, waving his hands high in the air to illustrate a top-level approach. "The point where they can understand it is when you work through what the technology will do for them and explain why they really need it. Then, they get it."
