Jean-Yves Charlier: returning to Fidelity after two years
Jean-Yves Charlier is off to Fidelity, after more than two
years running Colt Telecom, in which Fidelity is the biggest
— and dominating — shareholder. He's being
replaced by another Fidelity telecoms person, Rakesh Bhasin,
who was due to take over in late December.
The new boss will continue Charlier's work in transforming the
company from a competitive voice provider into a managed
Charlier, with an MBA from the Wharton School in the US, had
senior positions in Equant — now Orange Business
Services — and BT Global Services before being
recruited by Fidelity in April 2004 and moved into Colt four
He gave what was probably his final interview as president and
CEO of Colt to Global Telecoms Business.
Bhasin will join Colt's board when he becomes president and
CEO, and Charlier will leave the board.
Charlier is returning to Fidelity, and Bhasin is also a
Fidelity executive. He is being seconded from the investment
and pensions group after more than five years as president and
CEO of KVH, a telecoms company based in Tokyo which he has
transformed into a managed services business.
He will leave his executive position with KVH when he joins
Colt, but will remain non-executive chairman.
KVH and Colt have strong similarities. Fidelity set up the
Japanese operation in 1999 as an integrated service provider
supplying data, internet access, voice and data centre services
to business customers, with its own fibre networks and data
centres. It has 1,300 corporate customers in Tokyo, Yokohama,
Osaka, Shanghai, Bangalore and New York.
Continuing the work
Colt chairman Barry Bateman said that Bhasin will continue
Charlier's work in evolving Colt "from a voice provider to a
value-added and managed services company".
Meanwhile in Tokyo Bhasin's replacement is Miyuki Suzuki,
currently president and CEO of LexisNexis Asia Pacific. She was
previously a VP at Japan Telecom.
But there are contrasts: KVH is seven years old, and Colt is
twice that age. Colt is a company that, a decade ago, had a
state-of-the-art network across Europe. Some people —
rivals, mainly — say that the company needs to do some
fairly major investment in it in order to regain that position.
Is that an accurate assessment?
"We're upgrading our network continuously," says Charlier. "To
those detractors that say we have an old network, I'd say:
'Bollocks.' We have one of the most modern networks across
Europe that's still the envy of the industry."
Colt got "a couple of things right with our network", he adds.
"First, it's an all-fibre network, so those who are talking
about LLU and expanding their networks and copper upgrades
— how exciting! — versus an all end-to-end
So at the physical layer, "we got it right and we've had it
right for the past 14-15 years", he adds.
Colt was founded with Fidelity backing as long ago as 1992,
when it built a fibre network in central London. Since then it
has steadily expanded across Europe.
"The second thing is, a lot of people don't realise, we have
not only our fibre network but we have 14 data centres on the
back of our network. As these IP ecosystems come together we
have a competitive advantage that is second to none in the
The company has close to 1,500 customers that use the data
centres, he says. "If any of our customers walk into our data
centres: top-notch power, top-notch cooling. We're there to
serve the banks with the new blade server technologies, and so
And there's a third thing. "In this world, access is all
important. This is not a backbone network. This is an access
network. It's over 13,000 buildings that interconnect, 32 major
cities in Europe. And we've continuously upgraded that
When Charlier came into Colt "we were spending £125
million a year on the network" but "this year we'll spend
£150 million, and next year we've given guidance to the
market that it will be above £150 million".
That's an increase in investment of 20%, "and we're
continuously upgrading", he says. "We're connecting more
buildings, so it's reach in the cities where we operate today,"
and upgrading the system.
"We are making our network an all-ethernet network as part of
our next-generation investments. We're the first in Europe to
be rolling out ethernet-based LLU and DSL services that will
allow up to 40-meg speed on copper, and we'll be announcing in
the next few months a number of substantial upgrades throughout
the network over the course of the next three to five
This will take the network to a native IP ethernet network.
"That is a lot less in terms of investment, because all we have
to do is upgrade some of the electronics."
Isn't replacing the electronics a major task? "We're
continuously upgrading. I don't think next-generation networks
are about one big investment over five years, when you've got a
lot of your infrastructure right. It's going to be an ongoing
game. It's been an ongoing game at Colt for 15 years. We'll be
talking about next-generation networks in 15 years' time.
That's the reality of telecoms."
So there's a continuous process of refreshment in the network.
The big change, though, since Charlier took over at Colt "is
that we've been reopening data centres" across its
"We closed them down when the internet bubble burst and we've
been reopening these. We had built them from scratch during the
boom years for hosting back in 1998, 1999, 2000. We really see
demand," says Charlier. "We see customers wanting a combination
of high-speed, highly resilient networks and data centres in
creating these IP ecosystems. We think that's a proposition
that's second to none here at Colt."
The company now has 14 in operation. "We've just reopened the
last one, in Hamburg. These data centres tend to be in the tier
one, tier two European countries, where the bulk of the demand
Colt has "a very strong data centre presence in the UK and
France and Germany, Italy, Spain, Switzerland, Benelux. They
are the major centres that we operate."
Looking for new sites
Are there any more dark data centres awaiting resurrection?
No, he says. "We're looking at new sites already, given the
demand that we have. Some of our data centres are operating at
Where is the demand coming from? "What's happening in the
marketplace is that companies are realising that building data
centres in office buildings doesn't work. People now want
stand-alone data centre sites."
It doesn't work because of "expansion capability, power
issues" and so on. The financial services industry generally
led this trend over the past five to 10 years: "None of them
are building any more data centres in their office
Where they do have data centres in offices, such as London's
Canary Wharf, "I think most regret" this, he adds. "You don't
have the expansion capability over time. You're blocked."
Colt sees customers wanting it to supply primary or secondary
data centres, he explains. "That's the proposition we have, and
we do substantial managed services for those companies within
these data centres."
Managed services include "middleware and security management,
back-up on demand, storage services", and so on. "The revenue
per rack is one of the highest in the industry across Europe
— substantially more than stand-alone hosting
companies do, because we provide much more value from these
data centres, much more resilience, and the combination of this
highly secure, high resilience network that we have."
Let's turn back to that network. Colt is upgrading, but what's
the schedule for allocating contracts and doing the work?
"We're working through that. The first announcement was 40-meg
DSL across Europe. That's based on Actelis technology, an
Israeli-based company that we believe is the leader in native
That project has been rolled out in the Benelux countries and
it has been announced for France. "It will be our base
technology in our network for DSL. We're moving away from
ATM-based DSL technologies to native ethernet-based
Native ethernet services
Actelis will be the vendor across Europe. "Fundamentally we
believe in native ethernet services. We think if LANs are
ethernet-based, WANs need to be ethernet-based. It's pretty
simple. Why pay the cost and complexity of moving from ethernet
to ATM-based carrier services? And back again at the other end.
It doesn't make sense. We're really out there promoting
ethernet-based services and Actelis fits in well with our
The current speeds on DSL "will not service businesses well
down the road", he adds, which is why Colt is moving to a
standard of 40 megabits.
"This also goes back to the importance of having either a
consumer-based strategy or a business strategy. I said this two
years ago and I continue saying this for the altnets: you have
to choose your level of specialisation. I don't think the
residential market is ready to have ethernet-based services at
How does this DSL strategy fit with the fibre network? "You've
got to use both technologies. Our primary strategy remains
fibre, but the complementary is DSL."
Two years ago Charlier was also looking at WiMax as an
alternative for local access. Colt was thinking that WiMax
would be a good technology to deliver services up high-rise
office blocks. "We tried it," says Charlier. "Trials were not
as conclusive as we expected on one hand. Not failed. It works.
But the application in a business environment in major cities
is less evident than using WiMax in rural areas and in the
Business customers still like to understand the physical
layers of the network "and the security that comes with
physical networks versus wireless networks", he says. And the
economics of DSL are changing, "particularly the technologies
that allow us to have the type of speeds we're talking about,
that Colt's introduced to do 40 megs".
DSL speeds with these techniques "are more attractive than the
speeds that were going to be available around WiMax", he
Colt is delivering DSL on unbundled local loops in a number of
countries "where it makes economic sense". It's used for
retailers and small and medium enterprises in major
Corporate services for SMEs
With the core fibre-based metropolitan networks Colt aims at
both larger companies and the SME sector. "We've seen a drive
across Europe for SMEs to need more corporate-type grade of
services for their businesses. Those are the attractive SMEs
As part of its move into managed services Colt has "built very
specific services" for SMEs, "particularly in a converged
world, with our total offering". The company has added "about
2,000 customers for this service in a 12-month time-frame",
says Charlier. "We really see the demand."
The company is hunting out "information-intensive" companies
for this service, with around 50 employees. "That's the
definition for us. Today across Europe we serve over 50,000
companies. We have a broad business customer base across
Europe. That's fundamentally important in our strategy."
And that's the strategy that Rakesh Bhasin will no doubt be
taking over when he moves into Charlier's office in December.