BT 2004 Annual Report Download - page 11

Group strategy
Our strategy is to build long-term partnerships with
our customers. With their support, we aim to maximise
the potential of our traditional business – through a
combination of enhanced quality of service, creative
marketing, innovative pricing and cost efficiency –
while pursuing profitable growth by migrating our
customers to new wave products and services such as
ICT, broadband, mobility and managed services.
Our strategic priorities are to:
&keep a relentless focus on improving customer
satisfaction
&put broadband at the heart of BT
&create mobility services and solutions
&transform our network for the twenty-first century
&achieve competitive advantage through cost
leadership
&lead the world in network-centric ICT solutions
&reinvent our traditional business
&motivate our people and live the BT values.
Keep a relentless focus on improving customer
satisfaction
Reducing customer dissatisfaction by 25% a year over
three years, on a compound annual basis, to the 2005
financial year is a key target in our drive to deliver the
highest levels of customer satisfaction. In the 2004
financial year, we achieved a 22% reduction in
customer dissatisfaction, based on qualitative
customer research conducted by external agencies.
This follows a 37% reduction in the 2003 financial
year.
The lines of business all reduced customer
dissatisfaction levels during the year.
We are working to remove barriers to providing
customers with excellent service and to involve all our
customer-facing people in improving our service.
For example, our retail customer-facing and
support teams participated in the my customer
programme, designed to improve our customers’
experience and to promote teamworking.
Examples of my customer successes include the
introduction of a new contact centre structure that
enables our people to handle more calls at the first
point of contact and enabling engineering and contact
centre teams directly to update customer records.
Put broadband at the heart of BT
In the 2004 financial year, we continued our drive to
enhance the awareness, availability and attractiveness
of broadband. As at 31 March 2004, in the highly
competitive retail market, BT’s share of consumer and
business broadband connections in the UK was 42%,
representing 928,000 lines.
We aim to be a major player in wholesale
broadband and data services in the UK.
Broadband for wholesale customers
&In February 2004, ahead of our target, BT’s
installed base of broadband lines reached two
million. We achieved the second million lines in
just over eight months. As at 31 March 2004, we
had 2.2 million broadband lines, which represents
growth of 177% on the previous year, and our
target is to reach five million by 2006. In March
2004, we were taking an average of 50,000 orders
a week. In total, 2,465 exchanges had been
upgraded by the end of the 2004 financial year,
reaching more than 85% of the UK’s homes and
businesses. In May 2004, we announced further
broadband progress. The number of broadband
lines increased to 2.45 million, 2,652 exchanges
had been upgraded and total UK coverage reached
90%.
&The first step was upgrading to broadband more
than 1,100 of our exchanges where there was a
clear commercial case for doing so. In July 2002,
we introduced a demand-driven registration
scheme, which enabled people in areas where the
exchange had not been upgraded to register an
interest. This hugely successful scheme attracted
more than 860,000 registrations, helping us
match our investment to demand. Because the
registration scheme gave us such a clear picture of
demand, we were able to announce in April 2004
the speeding up of the delivery of broadband
services to rural communities. The scheme is now
closed and we intend to roll out broadband to a
further 1,128 exchanges by no later than the
summer of 2005. This will help bring broadband to
exchanges serving 99.6% of UK homes and
businesses.
&We continue to explore commercially viable ways
of bringing wireless broadband to rural
communities. In December 2003, for example, we
launched a trial of wireless broadband at sites
throughout the UK.
&The commercial launch of BT DataStream
Symmetric and BT IPStream Symmetric to 150
exchanges during the year significantly
strengthened our portfolio of business-class
broadband services, which service providers can
offer their customers. Based on SDSL (symmetric
digital subscriber line) technology, it provides the
same rate upstream and downstream and is
suitable for the SME, remote office and
teleworking access markets.
&In November 2003, we introduced a new, faster
broadband service for wholesale customers. BT
IPStream Home 1000 is a self-install product for
residential customers who want greater bandwidth
than the standard 512Kbit/s available at present.
&In May 2004, we announced that we are to
redesign and cut the price for our LLU (local loop
unbundling) product by between 15% and up to
70% in a phased series of price cuts. We believe
that this move will benefit those companies that
are willing to innovate and invest in broadband
infrastructure. The new LLU product will be closer
to simpler continental European models and we
aim to bring it to the market within six months.
Immediate price cuts should ensure that there is
sustainable demand prior to launch and help
potential customers plan ahead with confidence.
(See Other market reviews).
10 Operating and financial review BT Annual Report and Form 20-F 2004