BT 2008 Annual Report Download - page 36
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In some cases, our products and services incorporate software or
system requirements from other suppliers or service providers.
Our ability to meet our commitments in a timely manner may
depend on the ability of these suppliers and service providers to
meet their obligations. Failure to manage and meet our
commitments under these contracts may lead to a reduction in
our future revenue, profitability and cash generation.
Networks and systems failures
Our business depends on our ability to transfer substantial
volumes of data speedily and without interruption.
Any significant failure or interruption of such data transfer as
a result of factors outside our control could have a material
adverse effect on the business and our results from operations,
including the deployment of 21CN. We have a business
continuity strategy in place, designed to deal with such
catastrophic events including, for example, major terrorist action,
industrial action, extreme computer virus attack, hurricane or
flooding. A failure to deliver that strategy may lead to a
reduction in our profitability and there can be no assurance that
material adverse events will not occur.
Pensions
We have a funding obligation to a defined benefit pension
scheme.
Declining investment returns, longer life expectancy and
regulatory changes may result in the cost of funding BT’s
defined benefit pension scheme (BTPS) becoming a significant
burden on our financial resources. As a result, of the triennial
actuarial valuation of the BTPS at 31 December 2005, we
agreed to make annual deficiency payments of £280 million over
ten years. The first three instalments totalling £840 million were
paid upfront by April 2007.
The results of future scheme valuations and associated
funding requirements will be impacted by the future
performance of investment markets, interest and inflation rates
and the general trend towards longer life expectancy, as well as
regulatory changes, all of which are outside our control.
.............................................................................................................................................................
BT Group plc Annual Report & Form 20-F 35
Report of the Directors Business