BT 2003 Annual Report Download - page 10

Business review
BT Annual Report and Form 20-F 2003 9
the UK, and for multi-site organisations with European
operations, achieving global reach through partnership.
We have seven strategic priorities:
&to deliver the highest levels of customer
satisfaction performance and reduce the number of
dissatisfied customers each year
&to achieve organic profitable revenue growth,
while carefully controlling capital expenditure
&to put broadband at the heart of BT, expand the
market for broadband services and create a
media-enabled network
&to provide solutions and other value-added services
for multi-site organisations with European operations
&to place all UK networks under a single
management structure and to limit investment in
legacy voice and data platforms, while migrating
operations to new platforms
&to move into broadband and mobility services for
consumers; and also into advanced services, such as
communications solutions and outsourcing for major
business customers; and ICT (information and
communications technology) for SME (small and
medium enterprises)
&all delivered by diverse, skilled and
motivated people.
Customer satisfaction
Reducing customer dissatisfaction by 25% a year is a
key target in our drive to deliver the highest levels of
customer satisfaction.
BT has an extensive programme of quantitative
customer research run by external agencies to assist
us to focus on the level and causes of customer
dissatisfaction.
This research shows we achieved a 37% reduction
in customer dissatisfaction over the year, beating the
target of 25%. All areas of the business improved
satisfaction levels, with particularly significant
improvement among our international and wholesale
customers. Although in most areas customer
satisfaction is well ahead of our competitors, we will
strive to make further significant improvements.
A programme has been put in place that focuses on
key areas of customer dissatisfaction.
Broadband
Broadband is at the heart of our strategy and,
during the year, we made progress in our drive to
enhance the awareness, availability and attractiveness
of broadband.
As at 16 May 2003, we had 936,000 ADSL
(asymmetric digital subscriber line) connections and are
on track to meet our target of one million connections
by summer 2003. The speed at which this is happening
is generating economies of scale that will help us
continue to reduce costs and progress beyond the one
million figure.
A series of technological breakthroughs can,
for the first time, bring ADSL within potential reach
of 90% of UK homes and small businesses within
the next few years.
In November 2002, as further evidence of our
commitment to broadband, we announced the
appointment of BT’s first Chief Broadband Officer,
whose role is to direct and align the people and
processes involved in the end-to-end delivery
of broadband.
Reporting on BT Openworld
With effect from 1 January 2003, the former BT
Openworld results have been reported within BT Retail.
BT Openworld’s internet access and portal services
remain as a separately run business. All other parts of
the BT Openworld portfolio, including GamesDomain
and Dotmusic, together with the customer service and
network operations teams, have been integrated into
BT Retail.
This reorganisation has already delivered cost
savings and efficiency gains, mostly arising from the
avoidance of duplication in administrative and other
support activities.
Restructuring
During the 2002 financial year, we substantially
completed a radical restructuring programme, the
key elements of which were:
&the UK’s largest-ever rights issue – 1.98 billion
new shares were issued to shareholders who took up
their rights, raising £5.9 billion, net of expenses
&the demerger of the majority of BT’s mobile
businesses to create two separate listed companies –
BT Group plc and mmO
2
plc
&the disposal of significant non-core businesses
and assets
&the unwind of Concert, BT’s joint venture
with AT&T
&the creation of customer-focused lines of business
&a major programme of debt reduction.
Demerger of mmO
2
On 19 November 2001, we completed the demerger
of mmO
2
, comprising what were BT’s wholly-owned
mobile assets in Europe: O
2
UK (formerly known as
BT Cellnet), O
2
Communications (Ireland) (formerly
known as Esat Digifone), Telfort Mobiel, Viag Interkom,
Manx Telecom and Genie. Shareholders received one
share in mmO
2
plc and one share in BT Group plc for
each share they previously held in British
Telecommunications plc. Trading in BT Group plc and
mmO
2
plc shares began on 19 November 2001.
BT and mmO
2
, through arm’s length negotiations,
entered into a number of agreements to define the
continuing relationship between the groups, including
the agreement that, until November 2004, we will
exclusively promote the mobile products and services
of O
2
UK to the business market in the UK.
The agreements that we would not offer mobile
products and services to the consumer market in the
UK solely under the BT brand, and that parts of mmO
2
were able to use some of our trademarks and brands
on a transitional basis, both lapsed on 31 March 2003.
Acquisitions and disposals
Between the 1999 and 2002 financial years, BT made
a number of significant acquisitions, including taking
stakes in Japan Telecom and J-Phone Communications