BT 2014 Annual Report Download - page 45

42 The Strategic Report
Delivering our strategy
Products and services
Broadband
Our next-generation Wholesale Broadband Connect (WBC) network
can be used by CPs to oer copper-based broadband services to 92%
of UK premises (201213 90%) and bre broadband to around two
thirds of premises. Our older ADS network brings overall copper-based
broadband coverage up to 99.8%. Following consultation with CPs, we
have delayed the retirement of this network where it overlaps with our
newer WBC network. This retirement process will now be completed by
September 2014.
This year we launched new pricing options for additional network
capacity. These help our customers stay competitive despite the higher
network cost as broadband usage grows.
Data connectivity services
CPs use our Wholesale Ethernet portfolio to extend the reach of their
Ethernet network or, where they have no network of their own, to add
Ethernet services to their product range. They may also use it as part
of a broader solution, for example, to connect end-users to the Hosted
Communications Services we oer.
Our Ethernet portfolio oers speeds from 2Mbps up to 10Gbps,
delivered over the widest choice of access types in the market. This year
we expanded our Ethernet network in Great Britain from around 1,170
nodes to over 1,230 and connected it to key data centres and telehouses.
Where traditional leased line connectivity is required, we also provide
partial private circuits.
Our Mobile Ethernet Access Service connects mobile operators cell
sitesto their core networks over a single converged backhaul network.
We continue to roll out this innovative and market-leading solution to
more locations.
Voice services
Our Wholesale Calls product enables CPs to oer voice calls without
having to invest in their own voice network. CPs can present this as
their own service while we provide the underlying network and billing
capability on a white-labelled basis.
Where CPs have their own voice network, our Transit product connects
it to other CPs networks at low cost.
Ofcoms Narrowband Market Review, which came into eect from
January 2014, will signicantly reduce the price and protability of one
of our voice products, Direct Conveyance, which enables calls to be made
from CPs customers to BTs own end-users.
IP Exchange (IP)
Increasingly people and businesses are making calls over their broadband
and data connections, using VoIP. But while traditional PSTN calls use a
common standard (which ensures that they can be easily carried across
multiple networks), many dierent and incompatible technologies are
being used for VoIP.
IP translates VoIP calls made using these dierent technologies as well
as those sent between IP and PSTN networks. It ensures that calls get
to their destination at the intended level of quality. We sell IP through
BT Wholesale and, outside Great Britain, through BT Global Services.
This year we gave IP the capability to carry voice calls in high denition.
Hosted Communications Services
We launched our Hosted Communications Services portfolio this year.
It provides a range of IP voice application services including Hosted
Contact Centres, Inbound Call Services, IP Centrex and SIP trunking.
We host and manage these services on behalf of our CP customers.
This is intended to save CPs money and to make it simpler for their own
customers to run their businesses. CPs may buy the service either on
its own or as a complete package which includes any necessary data
connectivity and customer premises equipment.
Managed Solutions
We have a long and successful track record of designing, building,
managing and transforming CPs networks for them. We enable CPs to
oer complete voice, data and broadband products. We can extend this
to include an end-to-end service wrap, from taking and processing new
orders through to customer service and billing the end-user. This year we
launched a new white-labelled broadband service and are able to oer
signicant cost savings by sharing the broadband infrastructure across
multiple CPs.
These managed solutions give our customers access to our expertise and
economies of scale and aim to help them reduce their operating costs
and capital expenditure.
Media and Broadcast Services
All the UKs digital terrestrial TV is underpinned by our specialist media
network. This network also delivers outside broadcast services from over
150 sports and news locations around the UK. Our global media network
links all the main locations around the world where broadcast or lm
content is created or distributed.
We have a number of global alliances which extend our portfolio and our
geographical reach. For example, we have an alliance with Intelsat which
improves our ability, and theirs, to deliver content over both satellite
and bre connectivity. And we use partners to link TV stations to sports
venues in North America.
Performance in the year
BT Wholesales trading environment was tougher this year as a result
of some signicant customer, competitor and regulatory decisions.
Our order intake was slightly lower than last year at £1.9bn and
underlying revenue excluding transit declined 3%. But continuing cost
transformation meant we improved our EBITDA trend, which was down
just 1%. Operating cash ow was an inow of £372m, up 7% due to the
timing of customer receipts. Customer satisfaction was much higher as a
result of the investments we have made in our service.
Key facts:
Broadband lines declined by
194,000, driven by moves to
customers’ LLU networks
The outcome of Ofcom’s
Narrowband Market Review
will signiƬcantly impact
proƬtability
Ethernet revenue up 32%
with volumes up 50%
£1.9bn order intake,
compared with £2bn and
£750m in the two prior years
Customer satisfaction at 78%,
its highest level in recent years
Global IPX minutes up by two
thirds, and revenue more
than doubled
Operating performance
Despite the challenging trading environment we signed new deals worth
£1.9bn. This was slightly less than last years £2bn but well above the
intake of £750m the year before.
These deals show that we continue to oer compelling propositions and
that our customers trust in us to deliver.