BT 2012 Annual Report Download - page 27

24 Strategy
In order to identify further cost reduction opportunities we regularly
benchmark the cost of running our infrastructure compared with other
large telecoms operators around the world. The fact that we have cut
costs and improved service helps us to be much more competitive in the
market place but we recognise that there are further opportunities and
also lessons to be learned from beyond the telecoms sector.
Details of the contributions to our cost transformation
made by our lines of business can be found in the
Performance section on page
41
Investing for the future
Our industry has undergone radical change in recent years. Customers
demand more from communications services and competition is
increasing. By being more efficient in customer service delivery
and transforming our cost base we can provide services on a more
competitive basis and improve our cash generation, which in turn means
we can invest in the future of the business and drive growth.
We are focusing our investments around three broad objectives across
the business. These are to:
Defend and grow the value we add for our customers
As well as providing basic communications products, we have made
investments so that we can provide higher value services. For example,
super-fast fibre-based broadband for consumer and business customers
in the UK, managed networked IT services for large corporate and public
sector customers, and managed services for our wholesale customers.
BT Global Services is adding further value by offering industry-specific
solutions and expertise to customers. We have also made investments in
customer service and billing and in our virtual data-centres.
Capture opportunities in converging markets
The way that customers buy our products and services is changing.
Services which were once bought separately are increasingly bought
together, in bundles. This convergence creates both threats and
opportunities. We have been investing to broaden the range of services
we provide to customers as we expand into converging markets.
Examples include broadband and pay-TV in consumer markets and fixed
and mobile services in SME markets.
Capture opportunities in international markets
We have continued to invest in high-growth regions where customers
want to expand. We have strengthened our position by investing
in assets, people and technology to serve multinational and large
domestic customers on a global basis. For example, as our customers
have expanded into Asia Pacific and Latin America, so we have grown
our capability in these regions. We have new technology showcases in
New Delhi and Shanghai and a new secure operations centre in Sydney.
Network and customer service improvements have been achieved
and we have hired new people in key markets. In February 2012 we
announced plans to expand operations across Turkey, the Middle East
and Africa.
Our business model
We believe that we have a sustainable business model.
It is built on creating and delivering value for our
customers. We are confident that the model supports
our aim to grow the value of the business and our
strategy for doing so by investing in and focusing on
our six strategic priorities.
This confidence is based on the recognition that customers value our
products and services, which are an integral part of modern life for both
individuals and organisations. We can see an even greater role looking
forward, driven by:
 the fundamental need of individuals and organisations to
communicate and interact
 the wider availability of higher performance fixed networks
 the wider availability of business-critical network-based IT services
 the wider adoption of network-based IT services including cloud-
based services
 the superior cost and bandwidth performance of fixed networks over
wireless networks
 the increased desire of individuals and organisations to act
sustainably.
Our business model is underpinned by strong market positions in
combination with some market-leading assets and resources. This is a
difficult combination for competitors to replicate, and we are confident
that our business model is sustainable. That is why we continue to invest
in the business, foster innovation, maintain a strong cost focus, drive to
deliver superior customer service, and pursue paths to growth.
Our strategic priorities
In 2012 we made progress against our six strategic
priorities although the challenges we faced during the
year meant we performed better in some areas than
others.
You can read more about the achievements of our
lines of business in the Performance section on page 41
Driving broadband-based consumer services
Broadband connectivity is now available to 99% of UK premises and
it has become central to people’s lives, so the core of our consumer
strategy is based on building and maintaining a competitive,
differentiated broadband offer for our customers. There are several
elements to this:
 offer competitively priced bundles of broadband services with
telephony and TV – Competitively priced bundles drive both the
acquisition of new customers and the retention of existing ones,
slowing the rate of line losses to competitors. This also increases
Our strategy
Overview
BusinessStrategy
Performance
Governance
Financial statements
Additional information Overview
BusinessStrategy
Performance
Governance
Financial statements
Additional information