BT 2005 Annual Report Download - page 5

Today, BT is a very different company from the one that I joined
three years ago. As our customers’ needs have changed and
continue to change, so we have found and continue to find new ways
of meeting those needs, investing in innovative products and
services which add value to our customers and to BT. That, after all,
is what being a service company means.
Chief Executive’s statement
4BTGroup plc Annual Report and Form 20-F 2005
In 2005, convergence is at the heart of BT’s strategy.
By convergence, we mean the ability to bring together
our capabilities and capacities in new ways to make life
better, simpler and cheaper for our customers. For our
business customers this means productivity
improvements; for consumers it’s about new, easier to
use services. For customers of all kinds it means a more
joined-up communications experience.
So, for example, we offer our major corporate
customers around the world a unique marriage of our
networking experience and infrastructure with IT services.
These used to be separate offerings, often supplied by
different companies, but we’re bringing them together in
one place. This means that however much their
operations are dispersed around the globe, our customers
can communicate and operate as one, anytime,
anywhere, and at lower cost.
What we’re doing in the mobile market is similarly
about convergence – we aim to offer customers a
converged combination of ‘the best of fixed and the best
of mobile’. Ultimately, our customers shouldn’t have to
worry about fixed or mobile when what they really want is
freedom and flexibility. This means that we have to find
ways of helping them communicate, wherever they are,
using whatever device they choose, at the right price.
And convergence is also what our twenty-first century
network (21CN) programme is all about. What our
customers need to know is that the 21CN can support a
range of technologies and services that will enable them
to do the things they want to do – faster, more seamlessly
and more cost efficiently. And because this new network
will support a wide range of innovative services which are
currently run on separate networks, it will be much more
cost efficient for BT.
Global networked IT services
We have raised our global profile through targeted
acquisitions, including Infonet and Radianz, and by
increasing our holding in Albacom to 100%.
We continued to play to our strengths in the
networked IT services market. A few years ago, our
position in this market was aspirational; today, we are
competing with the best – and winning. The BT brand is
now a powerful presence in the global networked IT
services market. It’s a brand that stands for excellent
networking skills and a genuine commitment to finding
innovative ways of delivering what our customers want,
end to end, leaving them free to do what they’re good at:
running their businesses.
Our ICT (information and communications technology)
revenues were £3 billion in the year and the major
contracts we’ve won indicate the confidence that our
customers are prepared to put in us. We now have a track
record of meeting the needs of public and private sector
customers in, for example, the financial services and
government arenas.
Our networked IT services order intake for the year was
over £7 billion.
Broadband
Broadband has been an enormous success story, not just
for BT but for the UK as a whole, which now has the
highest levels of broadband access of any country in the
G7 group of nations. We hit our five million broadband
lines target a year early.
As broadband access becomes a fact of life for most
people in the UK, our focus is shifting further towards the
retail market where we have fantastic scope to drive
further growth.
Having got broadband, people now want to do more
and more with it. We are increasing speeds by up to four
times at no extra cost to our retail customers.
Convergent mobility services
The launch, in partnership with Vodafone, of our mobile
virtual network operator in both the business and
consumer markets is the key to building a mobility
customer base and a path to mobile convergence. We
now have over 372,000 contract connections.
Our strategy is to build a foundation for the delivery of
high-value, fixed/mobile convergent solutions, for
consumers and businesses. An early example of this will
be Project Bluephone which will give customers the
convenience of a mobile phone with the quality and cost
advantage of fixed-line services.
Twenty-first century network
Our 21CN will help to make the UK one of the most
advanced telecommunications countries in the world,
transform our wholesale business and support the next
generation of flexible, cost-efficient services. At the end of
April 2005, we announced the eight preferred suppliers
who will help us to implement the 21CN.
The capital expenditure involved is significant but the
21CN will lead to a radical simplification of our networks
making it easier to offer compelling propositions to all our
customers. The real challenge is to ensure that we invest
in a way that meets customers’ needs.
Traditional business
We are experiencing major changes in our traditional
markets as a result of regulation, growing competition
and significant shifts in our customers’ buying patterns,
as they discover the possibilities of technologies such as
instant messaging and voice over IP.