Building the network as a platform for integrated solutions and service innovations in the transition to the next generation of telecommunications: the case of BT

This thesis investigates the development of capabilities by incumbent telecommunications operators in the context of the transition to the Next Generation Network (NGN). In particular, it examines the case of BT in the UK, as a large-scale first mover in this transition. The research is based on recent developments in the telecommunications industry, and the empirical evidence was obtained through documentary analysis and a large number of interviews. Using the resource-based view (RBV) as a foundation, the wider theoretical contribution of this thesis lies in the proposition that integrated solutions are constructed through the combination of platform strategy, project business and service innovation. A unique contribution is to consider the customer/user perspective, as the traditional literature on integrated solutions relies heavily on the supplier perspective. Another specific contribution is in the integration of two aspects of the platform strategy that are usually treated separately in the literature: (i) the reusability of components and subsystems; and (ii) the openness of the platform to external actors in order to drive innovation in the industry. The empirical evidence points to the development of the following approaches by BT: (i) the deployment of the network as a platform, integrating both aspects mentioned above; (ii) the adoption of a customer-centric approach which resulted in the establishment of a new business unit, BT Global Services (BTGS), that required the development of stronger capabilities in integrated solutions, especially in professional services (i.e. consultancy, project management and systems integration); (iii) the use of the term ‘open innovation’ as a management injunction within BT in order to coordinate several initiatives which bring together internal and external collaborators and resources to innovate in services. The above approaches, however, have not changed BT’s core capability in the provision of network/infrastructure services. The challenge is to connect BT’s platform to their customers’ networks and to shape long-term relationships to enhance the profitability of the integrated solutions. Finally, the findings suggest that the platform and customercentric strategies may not be enough (or even be the right ones) for the survival and growth in the long-term future of BT in the telecommunications industry. This is evidenced by the recent failure (as of 2008) of BTGS to provide professional services profitably.