Telent boss is likely one of the Budget’s few cheerleaders

There aren’t too many business leaders who have a good word to say about the Government’s controversial tax-and-spend Budget. Jo Gretton is one exception. 

The boss of technology firm Telent, which employs 2,500 people, says the increase to National Insurance contributions ‘will be a drag’ but Chancellor Rachel Reeves’ commitment to boost infrastructure investment and improve public service efficiency ‘should be a boon’.

The reason she gives the Budget at least one cheer is because most of Telent’s business is with big, taxpayer-funded organisations such as Network Rail, the Maritime and Coastguard Agency and Transport for London.

So the Chancellor’s pledge to spend more on ‘fixing the foundations’ of the economy is music to her ears.

Born out of the ashes of the collapsed Marconi electronics empire, Telent specialises in critical national infrastructure.

‘The technology enhancements we deliver can massively improve productivity,’ says Gretton, ‘and ultimately benefit the public.’

Telent may not be a household name but what it does affects all our lives.

‘We estimate that everybody in the UK [indirectly] touches a Telent technology 15 times a day in terms of what we provide,’ Gretton explains. ‘That might be a traffic light, digital advertising on London Underground or customer information display signs.’

Gretton practised as a barrister before joining Marconi in 2000 – just as the company, once part of the GEC conglomerate, went on a disastrous acquisition spree that saddled the previously cash-rich firm with £4 billion of debt.

The bulk of Marconi was sold to Swedish telecommunications company Ericsson six years later.

The rump – mostly made up of a £4.5 billion pension fund – was renamed Telent and Gretton joined its management team.

Gretton, who describes the experience as ‘a roller-coaster’, rose through the ranks to become chief executive in 2020 – shortly after the pension fund was bought by an insurer. Telent is in rude financial health, having trebled profits to £20 million in the year to March 2024 on sales of £462 million, down slightly from £476 million the previous year. The outlook is good, too, with a ‘strong’ order book worth more than £400 million.

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

Gretton says JC Flowers will look to exit Telent ‘at some stage’.

‘They assure me I’m their best non-core asset – I might be their only non-core asset,’ she says of her company.

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

She also declines to comment on a recent Sky News report that said that Telent was up for sale with a price tag in excess of £300 million.

Among potential buyers is outsourcer Amey, which is part-owned by private equity group Buckthorn, where 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 biggest contracts is providing the communications network for National Highways, including ‘everything on the side of motorways’ such as emergency telephones, radar detection and CCTV.

When roadworks are set up, Telent comes in, bypasses civil contractors’ existing cables and lays its own.

‘When you drive and see the purple pipes, that’s got out fibre network in it,’ Gretton proudly notes.

Telent has also been drafted in to supply the technology for new refuge areas on so-called ‘smart’ motorways to address existing ‘safety concerns’, she adds.

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

‘If we’re not going to build new roads or railways, can we get more use out of what we already have?’ she asks.

To do that ‘you’ve got to have your network in place, whether that’s fixed or wireless,’ Gretton continues.

‘Having all this data means you can control, monitor, report and improve,’ she says, but it is no use ‘if you can’t see the wood 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 everyday lives.

Gretton says it’s still early days and lists a number of constraints on AI’s uptake.

These include power supply – the data centres used to train AI language models are hugely energy-intensive – and AI’s own capability and reliability.

‘One of the instructions you have to give AI is ‘don’t hallucinate’,’ Gretton reveals.

‘It will go off to any source data it’s been instructed to search and wants to find you an answer. If it can’t, it will create something for you but it won’t necessarily tell you that’s what it has done,’ she says.

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

As for the future, she sees AI gradually improving productivity by saving human labour.

‘It could mean having more trains going through a particular piece of track more quickly,’ she predicts.

Gretton worries about some aspects of AI, such as deepfakes, fraud and what she calls ‘bad actors’.

But perhaps her biggest concern is cyber security, where demand for Telent’s services ‘is already growing rapidly’.

‘Everything we do has to have a cyber security wrap around it,’ Gretton adds.

US President-elect Donald Trump has promised to end the war in Ukraine on his first day back in the White House this month.

Russia’s cyber hackers are mainly focused on harming Kyiv, but Gretton fears Moscow will redeploy their efforts to attack the West if a peace deal is done.

‘We have to be prepared,’ she warns.