BT 2009 Annual Report Download - page 15

ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS OVERVIEW
BUSINESS AND FINANCIAL REVIEWS BUSINESS REVIEW
13BT GROUP PLC ANNUAL REPORT & FORM 20-F
BUSINESS AND FINANCIAL REVIEWS
(2008: £744m, 2007: £665m), compared with an increase of 12%
in 2008. The increase reflects the increased investment in our
global infrastructure, customer related capital expenditure and the
impact of acquisitions, as well as the impact of foreign exchange
movements.
The above factors resulted in an operating loss of £2,106m,
compared with an operating profit of £117m in 2008 (2007: £70m).
BT Retail
Business overview
BT Retail aims to help its customers enhance the way they live their
lives and run their businesses. At home we enable our customers to
keep in touch with friends and families and to enjoy fast, reliable,
secure and safe connection to the internet. We are bringing
broadband to the TV and TV to broadband so that people can watch
what they want when they want. At work we serve small and
medium-sized enterprises (SMEs) (typically with up to 1,000
employees, although some are significantly larger) and enable
them to cut their costs and improve their service by using
communications and IT services that were once available only to
the largest businesses. We do this by taking the drudgery out of
implementing new technologies so our customers can focus on
doing what they do best.
There are four divisions in BT Retail: BT Consumer, BT Business,
BT Ireland and BT Enterprises.
We are the UK’s largest communications provider, with 20.7m
fixed lines and 4.8m broadband lines.
Market context
Market conditions have been challenging: the rate of growth in
demand for broadband has been slowing as the market matures
and competition intensifies, both from local loop unbundlers with
large customer bases to whom they can sell broadband, and from
the mobile operators who are now offering mobile broadband as
well as mobile voice. At the same time the economic downturn is
causing business and personal customers to shop around for the
very best value.
We have responded by offering customers complete packages
that meet their needs and deliver great value for money.
Operational performance
BT Consumer
Voice
We offer value for money services with three main packages of calls
and lines – Unlimited Weekend Calls, Unlimited Evening and
Weekend Calls and Unlimited Anytime Calls. All offer competitive
terms but customers who use us the most receive the best value.
In 2009, we announced our new Friends & Family Mobile scheme
which now offers discounts of up to 40% on calls to mobiles –
making it cheaper to call a mobile from a BT landline than from pre-
pay mobiles. We also announced that calls to 0845 and 0870
numbers would be included for free in our packages – a first for the
UK market.
Our new BT Basic tariff offers very low line rentals to vulnerable
customers on low income benefits. We are the only
communications provider in the UK to provide this service. In
addition we design our handsets to be ‘inclusive’ and meet the
needs of older and disabled customers.
Our range of handsets won praise in 2009 for its contribution to
reducing carbon emissions with new energy saving power supplies.
Broadband
BT Total Broadband is the UK’s most popular broadband service.
We offer a more complete experience than our rivals by including in
the price all the extras customers need to have a safe and enjoyable
broadband experience. For example, we offer McAfee security on
up to seven PCs in the house, and Digital Vault, which enables
customers to back-up valuable digital material including music and
pictures.
The BT Home Hub is at the centre of BT Total Broadband. It has
an iconic design and is the market-leading wireless router. Its latest
release offers unbeatable wireless coverage and reduced energy
consumption.
Some customers want access to the internet on the move. We
offer these customers 3G dongles as part of their Total Broadband
package. Further, BT FON enables customers who agree to share a
small, secure section of their home broadband connection access to
broadband via other BT FON members’ locations and BT Openzone
Wi-Fi hotspots. Between them, BT Openzone and BT FON offer BT
customers the chance to get online at more than 150,000 locations
in the UK and Ireland and another 50,000 locations worldwide
through roaming partners.
We also offer lower priced broadband and voice services under
the award winning Plusnet brand. Acquired in 2007, Plusnet offers
customers a leading online self-service experience.
BT was named as the Reader’s Digest most trusted internet
service provider (ISP) and voted joint top for broadband customer
service in a poll conducted by the Broadband Genie comparison
website.
BT Vision
Consumers increasingly want to buy telephony, broadband and TV
from a single provider. BT Vision – our on-demand television
service – enables us to meet these needs. It is available on
subscription or pay-per-view terms.
BT Vision gives customers access to more than 70 TV and radio
channels and pay-per-view services from a wide range of content
providers, including blockbuster movies and live Premiership
football. At 31 March 2009, BT Vision was the UK’s largest on-
demand service with more than 5,000 hours of programming
available.
The take-up of BT Vision accelerated during the financial year. By
the end of March 2009, we had 423,000 customers, around
double the number at the end of the previous year. More customers
Q1 Q2 Q3
2007 2008 2009
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
240
250
260
270
280
290
Average annual revenue per consumer household (£)