BT 2011 Annual Report Download - page 31

BUSINESS REVIEW
28
OUR LINES OF BUSINESS
Our television service, BT Vision, had 575,000 customers at
31 March 2011 (2010: 467,000). Following the Ofcom pay TV
market investigation in March 2010, we launched Sky Sports 1 and
Sky Sports 2 on BT Vision in time for the 2010-11 Premier League
football season. We also launched the BBC iPlayer service on BT
Vision and expanded our range of HD content, adding 3D movies
for the first time and enhancing our HD download service to
provide a better customer experience.
Our BT broadband customers benefit from free access to the largest
wi-fi hotspot network in the UK. Comprising BT Openzone, BT Fon
and Business Hubs, our customers can now get online at more than
2.8m locations. We have also launched the BT Fon application for
smartphones and tablet computers which automatically connects
to the BT wi-fi network and has been downloaded over half a
million times.
In January 2011 we launched our new Home Hub 3, including
Smart Wireless which looks for the best wireless channel to ensure
the strongest possible connection at all times. It uses 39% less
power and its smaller design typically uses 25% less plastic than
previous models.
BT Business
BT Business has seen continued growth in IT services and mobility
revenue up 17% and 14%, respectively, and an improvement in line
losses with net line losses in the second half of 2011 being 35%
lower than in the same period in 2010. During the year we
launched a range of new business broadband propositions, offering
a combination of competitive prices and tiered service levels as well
as fibre-based broadband offers.
We have also built our capabilities in the IT services market through
BT Engage IT and BT iNet. This year BT Engage IT announced it
would offer ‘pay as you go’ information security from Symantec to
offer value and flexibility to customers. BT iNet also now installs,
integrates and maintains a virtual data centre hosting solution for
SME customers. Our BT Business Direct online store provides IT,
computing and networking equipment plus associated installation
and support services for SMEs.
BT Enterprises
Note: BT Openzone revenues are currently recognised within other units.
BT Conferencing
BT Directories
BT Expedite
BT Redcare & Payphones
BT Enterprises revenue by business unit
23%
47%
23%
7%
BT Conferencing launched ‘Mobile Controller’ and ‘Desktop
Controller’ products for audioconferencing services which allow
customers to control their audioconferences from their mobile or
desktop more easily. We also launched interoperability for our
‘telepresence’ videoconferencing services.
In 2011 BT Directories released the compact Phone Book,
reducing its size by 15% to fit into letter boxes, saving 2,000
tonnes of paper each year. BT Directories also launched a free
Android smartphone application to make The Phone Book available
to mobile users.
BT Expedite delivered a new mobile-optimised web site for fashion
clothing brand, Lyle & Scott and extended the multichannel
capability for Pets at Home with the addition of “Click and Collect”.
The volume of traffic carried by the BT Openzone network more
than doubled compared with the previous year to around 3bn
minutes. In August 2010 BT signed a contract with Starbucks
Coffee Company to provide wi-fi across some 140 Starbucks coffee
shops in Germany, extending BT’s relationship with Starbucks in the
UK and Ireland.
BT Ireland
While BT Ireland’s revenue was impacted by the challenging
economic conditions, profits increased as a result of ongoing cost
transformation programmes and the delivery of large retail and
wholesale contracts.
During the year we rolled out super-fast fibre-based broadband
services in Northern Ireland. This investment, in partnership with
Northern Ireland’s Department of Enterprise, Trade and Investment
(DETI), will result in 89% of lines being connected to a fibre
broadband cabinet by March 2012.
In the Republic of Ireland, BT secured a number of significant
contracts in the corporate, government and wholesale sectors
including Danske Bank, Element Six and Pinebridge Investments.
Financial performance
2011 2010a2009a
£m £m £m
Revenue 7,748 8,124 8,491
Net operating costs 5,964 6,347 6,906
EBITDA 1,784 1,777 1,585
Depreciation and amortisation 443 459 426
Operating profit 1,341 1,318 1,159
Capital expenditure 434 417 471
Operating cash flow 1,382 1,566 984
aRestated. See page 106.
In 2011 revenue decreased by 5% (2010: 4%). Excluding a one-off
benefit of £40m in 2010 relating to prior periods, the decrease was
4%. Revenue in the second half of 2011 was down 3%, an
improvement on the 5% decline in the first half after excluding the
one-off benefit in 2010.
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