Telent boss is one of the Budget’s few cheerleaders

Not many business leaders have a good word to say about the government’s controversial tax and spending budget. Jo Gretton is one exception.

The boss of technology company Telent, which employs 2,500 people, says the increase in national insurance contributions “will be a drag” but Chancellor Rachel Reeves’ commitment to boosting infrastructure investment and improving efficiency improving public services ‘should be a blessing’.

The reason she at least compliments the Budget is because Telent does most of its business with large taxpayer-funded organizations such as Network Rail, the Maritime and Coastguard Agency and Transport for London.

The Chancellor’s promise to spend more on ‘repairing the foundations’ of the economy therefore sounds like music to her ears.

Born from the ashes of the collapsed Marconi electronics empire, Telent specializes in critical national infrastructure.

“The technological improvements we deliver can dramatically improve productivity,” says Gretton, “and ultimately benefit the public.”

Telent may not be a concept, but what it does affects our entire lives.

“We estimate that everyone in the UK comes into contact with a Telent technology (indirectly) fifteen times a day, in terms of what we deliver,” Gretton explains. ‘That could be a traffic light, digital advertising in the London Underground or signs with customer information.’

Gretton practiced law before joining Marconi in 2000 – just as the company, once part of the GEC conglomerate, was going through a disastrous takeover spree that saddled the previously cash-rich company with £4bn of debt.

Most of Marconi was sold six years later to the Swedish telecommunications company Ericsson.

The hulk – largely made up of a £4.5bn pension fund – was renamed Telent and Gretton joined the management team.

Gretton, who describes the experience as “a roller coaster,” rose through the ranks to become CEO in 2020 – shortly after the pension fund was bought by an insurer. Telent is in poor financial health and has tripled profits in the year to March 2024 to £20m on sales of £462m, down slightly from £476m the year before. The prospects are also good, with a ‘strong’ order book worth over £400m.

Telent is now owned by JC Flowers, the American investment company best known for backing financial services companies such as One Savings Bank.

Gretton says JC Flowers will try to leave Telent ‘at some point’.

“They assure me that I am their best non-core asset – I may be their only non-core asset,” she says of her company.

But she rules out a stock exchange listing ‘given our size and scale’.

She also refuses to comment on a recent Sky News report which said Telent was up for sale with a price tag of more than £300 million.

Among the potential buyers is outsourcer Amey, which is part-owned by private equity group Buckthorn, of which former Chancellor of the Exchequer Lord Hammond is a partner.

Any deal would have to be reviewed by the government on national security grounds, given Telent’s importance to critical infrastructure.

One of Telent’s largest contracts is to provide the communications network for national highways, including ‘everything on the side of highways’ such as emergency telephones, radar detection and CCTV.

When road works are carried out, Telent steps in, bypassing the existing cables of civil contractors and laying its own cables.

“If you drive and see the purple pipes, it’s a fiber optic network,” Gretton notes proudly.

Telent has also been tapped to provide the technology for new refuges on so-called ‘smart’ highways to address existing ‘safety concerns’, she adds.

Like Telent’s other contracts, the aim is to improve efficiency and productivity – in this case reducing congestion and smoothing traffic flows.

‘If we don’t build new roads or railways, can we make more use of what we already have?’ she asks.

To do that, “you have to have a network, whether it’s wired or wireless,” Gretton continues.

“With all this data you can control, monitor, report and improve,” she says, but there is no point “if you can no longer see the forest for the trees.”

Which brings us to the big issue of the day: artificial intelligence, or AI, the revolutionary technology that promises to transform our daily lives.

Gretton says it’s still early days and lists a number of limitations to the application of AI.

These include power supply – the data centers used to train AI language models are hugely energy intensive – and AI’s native capabilities and reliability.

“One of the instructions to give your AI is ‘don’t hallucinate,’” Gretton reveals.

“It goes to all the source data it needs to search and wants to find an answer for you. If it doesn’t, it will create something for you, but it won’t necessarily tell you that that’s what it did,” she says.

Telent is already using AI algorithms to detect rockfall patterns that act as early warning systems for landslides on railway lines along the Jurassic Coast in Dorset and Scotland.

Looking ahead, she sees AI gradually improving productivity by saving human labor.

“It could mean more trains moving faster through a given stretch of track,” she predicts.

Gretton is concerned about some aspects of AI, such as deepfakes, fraud and what she calls “bad actors.”

But perhaps her biggest concern is cybersecurity, where demand for Telent’s services is “already growing rapidly.”

“Everything we do must be surrounded by cybersecurity,” Gretton adds.

Newly elected US President Donald Trump has pledged to end the war in Ukraine on his first day in the White House this month.

Russian cyberhackers are primarily focused on harming Kiev, but Gretton fears Moscow will refocus their efforts to attack the West if a peace deal is reached.

“We have to be prepared,” she warns.