BT 2004 Annual Report Download - page 16

enabled entertainment service, in partnership with
Phillips, which enables customers to stream online
radio stations and download music to any part of
the house – wirelessly.
&BT Home Computing is a leading provider of
computing technology in line with the
Government’s Home Computing Initiative
legislation, which enables companies to provide
employees with the use of computers at rates
significantly below high street prices.
ICT for wholesale customers
To further our growth strategy, we aim to be the
network ICT supplier and sales channel of choice,
serving major corporate and government users, and to
serve SME and consumer end-users, building on our
existing intermediate and broadband portfolio.
&We signed wholesale ICT deals including a
contract, estimated at £5.5 million, to provide
Fibernet, the bespoke network service provider,
with a fully managed voice network and a
managed services contract with Intelliplus Group,
a subsidiary of Eckoh Technologies.
Reinvent our traditional business
We face continued challenges in our traditional
markets as a result of regulatory intervention,
competition and a shift in our customers’ buying
patterns, as we provide them with higher-specification,
high-value, new wave products.
Private circuit volumes fell, due to the switch into
lower-priced partial private circuits (as a result of
regulatory intervention).
Total fixed-to-fixed voice call minutes in the UK
market declined by an estimated two percentage
points in the 2004 financial year. This was driven by
customers making use of alternatives such as mobile
calls, e-mail, instant messaging, corporate IPVPNs and
VOIP.
However, call minutes are less important to BT as
customer take-up of pricing packages continues and
we actively migrate customers to new wave services
such as broadband.
Traditional services for consumers
&The BT Together pricing packages, which offer a
range of competitive call prices and fixed-fee
pricing options, are an important part of our
traditional revenue defence strategy, and had
around nine million customers as at 31 March
2004. During the year, we announced we would
abolish the standard rate on 1 July 2004 to give
more value for money. Existing standard rate
customers will move to join those already on BT
Together Option 1, which will become the
benchmark for our fixed-line call prices.
&We transformed more than 1,300 payphones in
UK high streets, shopping centres, airports and
stations into internet kiosks, offering internet
access, e-mail, text messaging and video. These
kiosks give fast access to a range of services, from
news and sport to shopping, games, local maps
and information about shops and restaurants. We
also continued to offer space in our payphone
kiosks for mobile antennas, Wi-Fi hotspots and
CCTV (closed-circuit television).
&During the 2004 financial year, we launched new
calling card products to serve the needs of
businesses and international travellers, including a
virtual card for data-only users.
&The immediate impact of the opening up to
competition of the directory enquiries market in
the UK in August 2003 was significantly to reduce
the overall size of the market. Volumes of calls
have continued to decline since deregulation.
According to the latest figures from Ofcom, calls
to all 118 service providers from the BT network in
the April 2004 sample were 23% down on
September 2003. However, since deregulation,
calls to BT Directories 118 services have
performed far better than the total market. Calls
to 118 500 are 30% up on the level experienced
immediately following the 192 switch-off.
&We successfully re-entered the classified
directories market with The BT Phone Book. 62,300
advertisers have signed up and 116 directories
have been published, achieving market
penetration of 5% in the first year. Our online
directory enquiries service, www.bt.com/
directoryenquiries, is the leading online player in
the market, with almost 1.5 million searches
(business name, residential and classified) a week.
The classified service is currently generating more
than one million searches a month.
Traditional services for business customers
&During the 2004 financial year, we introduced an
enhanced version of BT Business Plan offering a
ten pence price cap on calls to the US and a
20 pence cap on calls to Europe and certain
countries in the Asia Pacific region. We also
reduced the annual spend commitment to £250.
As at 31 March 2004, BT Business Plan had over
175,000 customers, compared with 20,000 as at
31 March 2003.
&Our innovative BT Local Business initiative helped
us gain traction in the SME market by building
closer relationships with smaller business
customers, who are often more comfortable
dealing with other small companies rather than
large corporations. At the end of the 2004
financial year, BT Local Business was active in
73 locations around the country and managing
£1.1 billion of annual billed turnover.
&BT remains the largest supplier of public and
managed payphones, strengthening our market
position during the year by securing a five-year
deal with BAA to supply traditional and new
multimedia payphones.
Traditional services for wholesale customers
Our strategy in the UK traditional wholesale market
has been to stem the decline in traditional revenues
while seeking areas for revenue growth. Our traditional
UK wholesale business has been under pressure from
several directions over the year. As 77% of our
15 Operating and financial review BT Annual Report and Form 20-F 2004