BT 2014 Annual Report Download - page 38

35
The Strategic Report
Delivering our strategy
Delivering our strategy
BT Conferencing
BT Conferencing is a leading supplier of audio, video and web
conferencing and collaboration services. We sell services to business
customers globally through sales teams in the UK, the US, Asia Pacic
and atin America. By using our conferencing services, people are able
to travel less, reducing carbon emissions.
Markets and customers
There are 4.9m businesses in the UK with up to 1,000 employees
(the market addressed by BT Business). Their communications and IT
needs vary widely depending on their sie, number of sites, industry and
stage of lifecycle.
Small businesses have simpler needs and they sometimes buy services
from consumer-orientated providers, including BT Consumer.
We have around 900,000 customers in BT Business. Major customers
include retailers such as Fat Face, WHSmith and Pets at Home charities
such as Anchor Trust, Barnardos and Oxfam service organisations such as
glh Hotels and Odeon Cinemas nancial organisations such as International
Currency Exchange and educational institutions such as University College
ondon. We serve more than half of FTSE350 companies.
In the UK, there are three markets that we focus on xed-voice and
data mobility and IT services.
Market size and BT Business share
£bn
Mobility
Fixed-voice
and data
Addressable IT
services market
40%
1%
6%
BT Business Rest of market
Source: BT Business revenue and IDC custom market-sizing model.
0
2
4
6
8
10
Fixed-voice and data
There are 8.3m business lines in the UK (201213 8.8m), including
both SMEs and large corporate businesses. Some of these lines are
provided by BT Global Services. There are more lines than the number
of individual businesses as many customers have more than one line.
BThas a 45% market share of business lines (excluding oIP), down two
percentage points in the year.
The SME market for xed-voice has been in decline for several years,
with call volumes falling due to substitution by mobile, email and oIP.
But the business broadband market continues to grow, and customers
are migrating from copper to bre-based services.
The market for data network services is fragmented. We are a leading
player with around a quarter of the market. Customer demand for
bandwidth continues to grow strongly but competitive pressure on
prices means the market sie is growing at a slower pace.
Overall, the xed-voice and data market is worth an estimated £3.7bn
and we have around 40% of it.
We compete against more than 300 resellers and xed network
operators. Alternative Networks, Colt Group, Daisy Group, KCOM Group,
TalkTalk, irgin Media, odafone and N are our main competitors.
Mobility
Mobile device sales are growing strongly in the market, driven by take-
up of smartphones and tablets. Data volumes and revenue continue to
increase but calls revenue is declining. Mobile apps, mobile security and
machine-to-machine mobile services are growing opportunities.
The mobile market is important to us as around three-quarters of SMEs
use both xed and mobile services. The part of the mobile market that
we target is worth an estimated £7.4bn, of which our share is around
1%. Our main competitors are EE, O2 (Telefónica) and odafone. They
are increasingly oering xed as well as mobile services.
IT services
The IT services market is large with a wide range of products.
Competition is fragmented. We typically target businesses with 250
to 5,000 employees. The largest ones are often BT Global Services
customers that we also provide services to.
We only target those product markets where we can leverage our
assets and capabilities. We estimate that the parts of the market that
BTBusiness serves are worth around £9bn, of which we have around
6%share.
Demand for cloud services, managed hosting, data centres and unied
communications services is growing as customers look for exible,
cost-eective solutions to help them work more eciently.
Our main competitors are Computacenter, Dimension Data, Kelway,
ogicalis, Phoenix and SCC.
Conferencing
We are the third largest player in Europe for video conferencing services.
For audio conferencing, we are the second largest in Europe and the
fourth largest worldwide.
Usage of audio conferencing continues to grow strongly. And while unit
prices have fallen, overall market revenue is growing steadily. The audio
conferencing market is worth around £4bn globally, and we have around
10% share of audio minutes.
The video conferencing market is also expanding. Desktop video
conferencing services are growing, but telepresence products and
services are in decline.
Our main conferencing competitors are ATT, Intercall, PGi and erion.
Products and services
We oer a wide choice of xed, mobile and IT services. These range
from simple standalone products to managed services and complex
customised solutions.
Fixed-voice services
Our xed-voice services range from standard calls and lines to fully-
managed oce phone systems and contact centre solutions. We are
increasingly selling oIP services, such as BT Hosted oIP and BT Business
Broadband oice (IP voice over the customers broadband connection).