ICL Plc reckoned that by the time of the first ticket purchase for the UK National Lottery earlier this month, it had already received revenues of UKP39m of the UKP125m initially raised by the Camelot Plc consortium, UKP50m in equity and UKP75m borrowing facilities from the Royal Bank of Scotland Plc. In the first year […]
ICL Plc reckoned that by the time of the first ticket purchase for the UK National Lottery earlier this month, it had already received revenues of UKP39m of the UKP125m initially raised by the Camelot Plc consortium, UKP50m in equity and UKP75m borrowing facilities from the Royal Bank of Scotland Plc. In the first year of the lottery to November 1995, ICL expects a further UKP35m, and thereafter about UKP8m per annum until the licence expires in 2001 – UKP122m in total for the seven-year life of the lottery franchise. On top of this ICL holds a 10% or UKP5m equity stake in the Camelot consortium, while the other four companies each hold 22.5%, so ICL will get a share of any profit Camelot makes. How come ICL has already made so much from the National Lottery? ICL and its subsidiaries have basically supplied the lottery structure. When Camelot was set up, ICL’s ICLE Recruitment rounded up Camelot’s 500 personnel; ICL’s Technology Plc supplied Camelot and GTech UK Ltd with 450 personal computers; ICL’s Workplace Technologies prepared the 13 sites for Camelot: two data centres in Rickmansworth and Liverpool, a distribution centre in Northampton and 10 regional offices; ICL’s D2D is assembling all the terminals – 13,600 to date with 10,000 installed, 39,000 installed by the end of 1996; ICL’s Peritas is training all the retailers, 34,000 to date; and ICL Customer Services is delivering, installing and maintaining all the terminals with a team of 150. ICL would have liked to supply the computers for the data centre and components for the terminals as well, but GTech Corp’s software, which took 300 man-years to develop and is used for 75% of lotteries worldwide is written for Digital Equipment Corp VAXes and it was impratical to rewrite it all. According to Mike Pollitt, general manager of ICL New Ventures, the National Lottery was an ideal opportunity for ICL’s services business and the prime motivator for ICL. And it is from the service and support side that most of the stabilised UKP8m revenues will come. ICL Customer Services will provide three levels of support: within cities, two hours ‘call-to-fix’; in towns and rural within four hours; outlying areas – the Highlands and Islands – next day service. It has re-engineered its logisitcs structure to guarantee a spare terminal 30 minutes away in most situations. Customer Services expects between 60,000 and 70,000 calls in the first year, rising to 250,000 calls when all 39,000 terminals are operating. This compares with 160,000 calls that Customer Services currently deal with. ICL stresses that the level of calls is not because the terminals are unreliable but ‘user-related’ errors – kicking the plug out, replacing the paper supply and so on. The support requirements for the National Lottery are unlike any other ICL contract, as the terminals will be used far more of the time than normal personal computers and points of sale and will have different peaks, 30% of ticket sales are expected between 4pm and 6.30pm on Saturdays. Therefore Customer Services will provide support Monday to Saturday 6am to 10pm and Sundays 1.30pm to 10pm, 364 days a year. In addition to the 11 service centres, there will be 30 dropping points for terminals. The Customer Services team comprises 100 new engineers, plus 50 from the existing workforce. This team will focus exclusively on the UK lottery to begin with, but will cover ongoing ICL retail support operations in time. ICL hopes the success of the lottery, and especially the relationship with GTech, will generate further business elsewhere where GTech wins European lottery deals. ICL already has pan-European service contracts.