TalkTalk Group’s transformational refinancing deal has created a springboard for PXC to accelerate its expansion and set a more focused agenda around go-to-market, altnet aggregation, enhanced channel partner engagement, product innovation and development alongside a greater emphasis on growth-focused leadership strategies, according to newly appointed PXC CEO James Smith.
2024 is shaping up as a defining year for PXC. Yet while there have been no fundamental shifts in how the wheels of the business turn, an acceleration of strategic moves and investments will prove to be uniquely transformational and innovative, according to Smith. He joined TalkTalk Group as CFO at the start of 2023 and worked on the demerger of the network wholesale business to create PXC as a standalone entity in March this year. Smith’s hands-on role in developing the strategy and business plan prepared him well for the CEO position he adopted in September. “We’ve renewed our debt facilities and attracted an additional £400 million investment,” stated Smith. “This enables us to accelerate our strategy and fully leverage our market positioning.”
Before joining TalkTalk Group, Smith was CFO of a FTSE-250 energy business for nine years, where he led a portfolio transformation to decarbonise and future proof the firm against a changing macro backdrop. This followed a career in investment banking working on M&A and financing projects for firms in the infrastructure and energy spaces. “I’ve specialised in big strategic change projects which is what we have done by creating PXC out of the TalkTalk Group,” added Smith.
We already have a national scale network and nearly 1,000 wholesale partner channels, so the opportunity is to deliver new and more products over that strong base
His primary aim right now is to establish a process of simplification and clear prioritisation in the context of a customer base approaching four million. “What we do day-to-day across our national scale network is operationally and technologically challenging and can make us feel like a large and complex organisation,” said Smith. “We will always deliver the scale, resilience and reliability we are known for but need to ensure we can be entrepreneurial and nimble enough to respond rapidly to new demands from the market, our partners and their customers.”
Ultimately, noted Smith, PXC is serving a fixed line connectivity market that constantly demands higher speeds and greater resilience, which is a major driver for an accelerating strategy around the key connectivity markets. “Altnets are an increasingly important part of our strategy as we rapidly increase our FTTP penetration and Ethernet base, which is a key differentiator for PXC as the only scale wholesale aggregator platform in the UK,” claimed Smith.
Much of the necessary large scale capital investments into a full fibre future are now behind PXC, perhaps most notably a multi-year dark fibre investment in its backhaul network which enables the firm to scale its backhaul capacity while lowering its operating cost model. “Our investment focus is now on new product delivery and innovation,” added Smith. “We already have a national scale network and nearly 1,000 wholesale partner channels, so the opportunity is to deliver new and more products over that strong base as we move to an all-IP product set. My job as CEO is to focus down and deliver on the strategy that will drive the business further into the future.”
As business leaders, the most valuable assets for continued success are openness to change and the ability to learn and adapt
He also pointed out that Ethernet has long been one of PXC’s strengths, boosted by the acquisition of Virtual1 in April 2022. “The base was built on a 100MB product set but nearly half is now on 1Gb+ speeds – there is a huge opportunity for 10GB Ethernet,” added Smith. “The pace of that transition to products 100x the speed is incredible and symptomatic of the demands that we’re meeting in our industry ever year. But while connectivity demands grow, it’s also critical that we continue to build on our overlay products in cloud, security and voice. We’re making sure our partners have access to products from industry innovators like Zoom so they can continue to see future growth and meet emerging opportunities.”
Increasing demand
Smith underscored the extent to which demand for faster connectivity is accelerating by citing FTTP uptake figures in PXC’s residential consumer bases, which are already at 25 per cent adoption – a quarter of which is through altnet partners. “There has been amazing growth from what was a low base over the last couple years,” added Smith. “In our B2B customer bases we have recently launched business grade FTTP as well as our altnet offering at scale, and the clear market feedback is that this will grow fast.”
Another path to accelerated growth being explored by PXC is the potential of AI to transform processes, and over the past six months the company has developed several proofs of concepts. “The ones showing the most potential across sectors are those that offer co-pilot and chat-based capabilities,” explained Smith. “Within PXC, we have developed a knowledge bot which acts as an AI co-pilot for new engineers, driving up their speed to competency across complex areas such as network configuration and issue resolution in our front-line operations teams.
“We are also working with some of our technology partners to deploy Gen AI across software delivery such as automated test data generation, basic code creation and in operations anomaly detection and machine learning to proactively identify and ultimately avoid incidents and service disruption. It’s early days, but as a tech company we see real potential, given the right use cases, for AI to drive growth for both our business and partners.”
Smith is just as enthusiastic about the potential for proactive business leaders to adapt and innovate, especially in times of industry transformation. “Over the past few years our industry has had to quickly rise to the challenge of a once in a generation development in fixed line infrastructure, ever growing bandwidth demands, new working structures, the widening range of IoT, AI and so much more,” he added. “As leaders, the most valuable assets for continued success are openness to change and the ability to learn and adapt on the go.”
Just a minute with James Smith...
Your main strength and what could you work on?
Resilience is a strength: I’ve been through some upending situations in my career and learned to be thick skinned and calm. But time management and prioritisation is always a challenge.
Three ideal dinner guests:
Isambard Kingdom Brunel, as I’m fascinated by the Victorian transport revolution which was probably even more transformational than the communications revolution in our own life time; Lafayette, I’ve been listening to podcasts about the American War of Independence and the French Revolution – he was at both; and David Bowie because I spent much of my youth listening to his music.
If you weren’t in the industry what would you be doing?
I was a keen pianist at school and nearly didn’t go to university because I thought I wanted to be a professional musician. So if I hadn’t led this life I’d probably be a second rate musician trying to scrape together a living.
Your favourite comedian or comedienne?
Kevin Bridges: I’ve lived in Scotland for the last ten years and blunt, self-depreciating humour is the country’s best asset.
Best advice you have been given:
Understand what you can control, and what you cannot. There’s a good book called Dance with Chance written by a professor I met at Insead. It’s about how we delude ourselves about what we can control, and then don’t spend enough time focusing on what we can actually influence.
What talent do you wish you had?
To be a good swimmer. I just splash and don’t get anywhere fast.
The biggest risk you have taken:
Earlier in my career I moved jobs for the promise of a promotion and some money at a time when we had just taken on a big mortgage and my wife was expecting a baby. It was 2007 and the new job was at Lehman Brothers, so that didn’t work out brilliantly.
How do you relax?
Boxing, which I took up in my early 40s in what my wife would describe as a moment of mid-life crisis. But I love it. Relax is probably the wrong word but it’s great therapy.
Your biggest career achievement:
When I made the transition away from my career in investment banking ten years ago to become CFO of one of my clients. Anyone who has made the transition from being an advisor or a consultant to becoming involved in running an actual business will know that it’s followed by a massive dose of ‘real life’ and a steep learning curve.
One example of something you have overcome:
A derelict house: We bought it in lockdown without really understanding what we were taking on. It’s been brutal but we’re nearly ready to move in.
In three words, what are today’s top leadership priorities?
Openness, authenticity and vision.
Industry bugbear?
We need to drive for more diversity, not just for the societal responsibility we have, but because all the evidence and research proves that having teams of people from a wide range of backgrounds, abilities and experiences leads to better decision making and innovation.
Top tip for resellers:
Only do profitable business. That sounds obvious but it’s easy to focus on volume growth and market share which doesn’t necessarily make you money.