BT 2006 Annual Report Download - page 14

We continue to look at ways of streamlining our organisation
and eliminating duplication. The integration during the 2006
financial year of the BT team serving major corporate customers
in BT Global Services (previously part of BT Retail) should
enable more effective account management for our global
customers.
We also continued to reduce overheads such as
accommodation, using buildings more efficiently and
introducing flexible working practices. In the 2006 financial
year, we vacated around 135 buildings and installed an
additional 250 flexible workstations which can be shared by
multiple users.
A number of other programmes are underway, including
structural changes in our network management and planning
divisions. Some of these are related to our 21CN initiative and
will, we believe, help achieve the significant reduction in
operational and capital expenditure that we expect from this
programme in the next few years.
TRANSFORM OUR NETWORKS, SYSTEMS AND SERVICES FOR THE
TWENTY-FIRST CENTURY
Our UK network today
BT has the most comprehensive communications network in the
UK, with around 5,600 exchanges, 680 local and 103 trunk
processor units, more than 121 million kilometres of copper
wire and more than eight million kilometres of optical fibre, and
the most extensive IP backbone network in the UK. The network
services we provide include frame relay, ATM (asynchronous
transfer mode) and IPVPN.
Our global reach today
We have one of the broadest IP-enabled networks in Europe and
our network-based services extend to and across North and
South America and the Asia Pacific region.
As at 31 March 2006, our flagship MPLS network service
provided coverage and support to over 90 countries from more
than 1,200 points of presence. Our MPLS revenue grew by 34%
during the 2006 financial year, exceeding £400 million.
Global customer service is provided via service and network
management centres around the world, 24 hours a day, seven
days a week.
Twenty-first century network
We believe that our 21CN programme is the most ambitious
business transformation programme in the global
telecommunications industry today and one of the largest ever
investments by a private company in the UK’s infrastructure.
An end-to-end, next-generation IP network, 21CN is
designed to consolidate BT’s complex network and systems
infrastructure to ensure that the delivery of the next generation
of converged services is fast, efficient and highly cost effective.
In the 2006 financial year, for example, we developed the first
new 21CN services based on re-usable capabilities. Rather than
being product-specific, re-usable capabilities form the basis for
a range of products and applications, enhancing the customer
experience by reducing product development and launch times
and proving more cost effective for BT.
In April 2005 we announced the preferred suppliers that will
help us build the 21CN. Following one of the largest
procurement programmes ever undertaken in the
communications industry, formal contractual agreements were
reached with all eight – Alcatel, Ciena, Cisco, Ericsson, Fujitsu,
Huawei, Lucent and Siemens. The first equipment orders have
been placed under these contracts.
Following extensive technical trials in the 2006 financial year –
including successfully carrying more than six million voice calls
over a trial IP network – we developed a comprehensive national
migration and roll-out plan, which is currently subject to
industry consultation.
As the first stage of the mass migration of customers to
21CN, we will be rolling out the new network to business and
residential customers in Cardiff and the surrounding area,
including many served by other telephone and internet service
providers and mobile operators. We anticipate that the full,
national roll out of 21CN will be substantially complete by
2010.
We are committed to building open, transparent and
inclusive relationships with the rest of the industry and launched
Consult21 in the 2005 financial year in order to promote a
shared understanding of the 21CN vision and the progress we
are making towards it. Since then, many of our wholesale
customers have contributed to what is now the largest voluntary
industry consultation programme of its kind anywhere in the
communications world today.
What 21CN will mean for customers
21CN will mean the ability to customise, personalise and
change in real time services based on the convergence of voice,
mobility, video, data and content. Ultimately, it is expected to
support the introduction of many more new services than are
currently available, offering greater customer choice.
Corporate and public sector customers will be able to work
more efficiently with suppliers, structure their internal
processes, enhance customer service and drive down costs by
deploying integrated networked IT solutions across their entire
supply chains.
CREATE LONG-TERM PARTNERSHIPS WITH OUR CUSTOMERS
We believe that our relationships with our customers are key in
a market going through major transformation. Understanding
customers’ needs and responding to them flexibly,
comprehensively and with insight is critical in helping to
differentiate us from our competitors. That is why we aim to
put the customer at the heart of everything we do –
strengthening that relationship and building trust and delivering
what we promise. This will encourage customers to move from
short-term contracts based on individual transactions, to longer-
term arrangements under which they sign up for packages of
services.
Keeping a relentless focus on improving customer
satisfaction is also key to these long-term partnerships.
In the 2006 financial year, our aim was to increase the
number of customers who are ‘very satisfied’ and ‘extremely
satisfied’ with the service they receive from BT by 5%, while
ensuring that we maintained the reductions achieved in
previous years in levels of customer dissatisfaction.
For the 2006 financial year, the average score for customers
‘very satisfied’ and ‘extremely satisfied’ was 3% higher than in
the 2005 financial year, although the customer dissatisfaction
score was slightly worse than in the 2005 financial year.
The 2006 financial year was particularly challenging for the
delivery of customer satisfaction because many of our new wave
products and services require complex customer interactions.
During the year, we recruited a further 900 engineers to ensure
that we could meet customer demand.
We recognise that the quality of service we offer customers
is key to driving up customer satisfaction levels and much of our
training and development activity remains focused on removing
any barriers to the delivery of excellent customer service and a
BT Group plc Annual Report and Form 20-F 2006 Operating and financial review12