GPT seeks international focus

GPT seeks international focus
Richard Wilson The success of GEC’s plans for its new telecoms baby GPT will hinge on the firm’s continuing technology partnerships and international joint ventures. Any speculation over whether GEC has taken full control of the GPT telecoms manufacturer because it wanted to, or just because Siemens wanted to off-load its 40 per cent stake in the firm is, frankly, irrelevant. What is important is how GEC’s reforming managing director George Simpson will demonstrate his commitment to a business that still has aspirations to be a leading player in many global telecoms equipment markets, such as public network systems and smartcard payphones. Arguably those aspirations will only be fulfiled if GEC fosters GPT’s existing technology collaborations and, more critically, encourages GPT’s new UK management to develop international partnerships. Initial signs look promising. GPT’s key technology and marketing partnership with Siemens for its SDH optical fibre transmission systems remains in place. Working together, Siemens and GPT engineers and sales staff have won a 30 per cent share of the world’s SDH systems market. The importance of maintaining that partnership is obvious. According to GPT’s international sales director Peter Warn: “The sales we have through Siemens are around 20 per cent.” However, GEC should start looking to find a new technology partner for GPT as a hedge against the day when Siemens may lose interest in the SDH collaboration. Simpson has made it clear that international partnerships are the way forward for GEC’s Marconi military businesses. The expectation at GPT’s sites in Liverpool, Coventry and Nottingham will be that Simpson puts his weight behind a similar partnership strategy in the telecoms business. The first modest move is merging GPT with GEC’s existing, but much smaller Italian telecoms business Marconi SpA. However, a lot more than that will be needed if GEC is to live up to its new found commitment to grow a global telecoms business. Perhaps Alcatel, a longstanding business partner for GEC in power generation and transport, would be a good place to start in forging a telecoms alliance that lasts. There is certainly a firm commitment from GEC to develop and grow GPT’s ?1bn telecoms business following the Siemens buyout. Indications are that Simpson has already committed himself to an increase in GPT’s R&D budget from 13 to 20 per cent of sales. Perhaps most revealing of all is Simpson’s view that the divided ownership of GPT between GEC and Siemens “constrained” rather than helped the company’s growth. “We had a fundamentally flawed joint venture,” he said about the deal with Siemens, which he only inherited and did not create. GPT, now renamed Marconi Communications, and its employees will be expecting a future that is more focused on international success.


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