BT 2006 Annual Report Download - page 11

In May 2006, we were awarded a three-year extension – worth
around an additional £270 million – to the existing contract to
deliver Unilever’s voice, data and mobile services around the
world until 2012. The original contract, announced in
November 2002 and with an estimated value of £670 million
over seven years, was the first comprehensive global
telecommunications outsourcing contract won by BT and is one
of our largest and most significant global deals.
In the 2006 financial year, we secured networked IT services
orders in the UK and internationally worth £5.4 billion,
including a number of major contracts:
sin June 2005, we signed a contract worth approximately
E175 million over a seven-year period with leading global
brewer InBev, for the outsourcing of its communications
infrastructure – data and voice – around the world
sin July 2005, we signed a two-year contract to manage
Microsoft’s OneCall call centre routing initiative. Under the
agreement, we will design, build, deploy and manage a
solution to unify the majority of Microsoft’s contact centres
around the world into a single, networked contact centre
environment
sin December 2005, we reached agreement with the
Department for Work and Pensions (DWP) on the
simplification of the contracts that the Department inherited
when it was created from the former Department of Social
Security and the Department for Education and
Employment. Under the agreement, we will supply services
based on modern, reliable IP communications that take
advantage of our 21CN programme to deliver consistent and
flexible services which will, we believe, lead to substantial
efficiencies and new capabilities for the DWP and its clients
sin February 2006, we completed an agreement to become
Fiat’s supplier of global telecommunications services in 40
countries, in a deal worth approximately E450 million over
almost five years. (See also Acquisitions and disposals in
the 2006 financial year)
BT is listed in the leader quadrant in the Gartner Magic
Quadrants for Global and pan-European NSPs (network service
providers), and in 2005 was listed for the first time in the leader
quadrant for Asia Pacific NSPs. Gartner’s reports evaluate the
NSPs operating in the various regions for their completeness of
vision and ability to execute, and BT was consistently ranked in
the top five. The NSPs that score well are those that go the
extra mile to deliver superior service quality through their pan-
regional networks, local service and support and service level
commitments.
Networked IT services revenue for the 2006 financial year
was £4,065 million, a rise of 33% on the 2005 financial year.
Deliver on broadband
In the 2006 financial year, we continued our drive to enhance
the awareness, availability and attractiveness of broadband. As
at 31 March 2006, in the highly competitive retail market, our
market share of consumer and business DSL (digital subscriber
line) and LLU (local loop unbundling) broadband connections in
the UK was 33% (2.6 million connections).
Broadband for wholesale customers
In early April 2005, we reached our target of five million
broadband lines one year ahead of schedule. At 31 March
2006, we had 7.9 million lines, including those provided via BT
Retail and LLU. In total, 5,501 exchanges had been upgraded
by 31 March 2006, making broadband available to 99.7% of
the UK’s homes and businesses.
We continue to look for commercially viable ways of bringing
broadband to those customers for whom availability remains an
issue. We are, for example, exploring the feasibility of installing
broadband equipment at locations closer to the customer than
the BT exchange, as well as the possibility of delivering
broadband over existing fibre cables. Both trials will run until
summer 2006.
As a demonstration of our commitment to delivering higher
speed broadband to UK consumers, 59% of wholesale
broadband lines were 2Mbit/s at 31 March 2006, compared
with 17% a year earlier.
Having conducted trials of broadband speeds of up to
8Mbit/s in association with a number of service providers, we
launched BT ADSL (asymmetric digital subscriber line) Max and
BT ADSL Max Premium broadband services nationally with
effect from 31 March 2006. By upgrading more than 5,300
exchanges across the UK to support this service, we are
providing the UK market with a stable, high-speed broadband
service across the widest national footprint in the world.
Although the broadband speed that can be supported on an
individual line is governed by a wide range of physical factors,
our trials suggest that 78% of BT phone lines should support
rates of at least 4Mbit/s. In addition, we have enhanced
broadband line stability to ensure that customers can run more
bandwidth-hungry applications, including video, gaming and
music downloads, at the same time as sending/receiving e-mails
and surfing the internet.
Broadband for consumers
We offer a family of broadband packages designed to meet the
diverse needs of our customers, simply and cost effectively in a
highly competitive market. In October 2005, in partnership with
Yahoo!, we simplified our broadband packages into four options,
each of which offers new and existing customers a premium
Yahoo! broadband experience, enhanced security features and
the option of cheap internet telephony.
We are helping to define next-generation television – which
is being made possible by the convergence of digital broadcast
TV and broadband technology. During the 2006 financial year,
we put in place a number of the key building blocks designed to
enable us to launch the BT Vision broadband TV service in
autumn 2006. Microsoft will help to provide the software
platform over which BT Vision will run and the set top boxes will
be provided by Philips, Europe’s largest electronics company.
The service aims to combine access to digital terrestrial
channels, an extensive video-on-demand library, catch-up TV
and a range of interactive services, offering customers choice,
convenience and control over their home entertainment. Other
services which should be available at launch or shortly
afterwards will include: personal video recording; more than 30
digital terrestrial TV channels; communications services –
instant messaging, chat and video telephony on the TV, and
interactive services – online gaming, retail opportunities and
community services – all without the need to pay an up-front
subscription.
We have signed content deals with BBC Worldwide,
Paramount, Warner Music Group, Endemol, i-concerts, Eagle
Rock, Cartoon Network, National Geographic Channel, HIT
Entertainment and Nelvana.
We are also playing a lead role in the development of
internet telephony or VolP (voice over IP). International calls
made with BT Communicator – which enables customers to
make voice calls over the internet using a PC or laptop – are
proving cheaper than those offered by many other suppliers. BT
Communicator comes with Yahoo! Messenger which provides
Operating and financial review BT Group plc Annual Report and Form 20-F 2006 9