BT 2014 Annual Report Download - page 43

40 The Strategic Report
Delivering our strategy
Performance in the year
We have grown revenue 4%, the most in over ten years. Our EBITDA
was down 14% this year reecting our investment in BT Sport which
oset the benet of our cost transformation activities. We have seen
good growth in bre broadband and have increased our share of the
DSand bre broadband market, adding 69% of market net additions.
BT Sport has helped drive broadband take-up and slow line loss.
We need to strengthen our customer service to provide a consistent
customer experience, underpin our value-for-money positioning and
meet changing expectations.
Key facts:
Around 3m direct BT Sport
customers
1m BT TV customers
69% of DSL and Ƭbre
broadband market net
additions
Retail Ƭbre base grew by
869,000
Operating performance
At 31 March 2014 we had 9.9m consumer xed-lines, with around
9.7m active voice lines (where a customer buys calls from us as well
as paying for the line). Despite the competitive environment, we have
managed to signicantly slow line loss. We reduced our rate of net line
loss by over 50% to 314,000 in the year. We lost just 196,000 net
active lines, compared with 496,000 last year.
This shows our strategy is delivering. We are winning new customers and
retaining existing customers through bundled packages and the appeal
of BT Sport. Around 98% of our broadband sales are now bundled with
other products and 91% of our broadband customer base takes a bundle
of services.
Annual consumer line losses
Year ended 31 March
2012 2013 2014
Net active line losses Net total line losses
000
(478)
(883)
(196)
(314)
(496)
(712)
0
(100)
(200)
(300)
(400)
(500)
(600)
(700)
(800)
(900)
(1,000)
Total consumer and business call minutes fell 12% compared with a 9%
decline last year.
As at 31 March 2014 we had 7.3m consumer and business broadband
customers, up 9%. We achieved 571,000 broadband net additions.
This was 35% more than last year despite slowing growth in the market
and represented 69% of DS and bre broadband market net additions.
We now have over 2.1m bre broadband customers, increasing 869,000
in the year. Around 30% of our broadband customers now have bre.
Our consumer ARPU increased to £391 (201213 £365) driven mainly
by broadband take-up.
We have continued to grow our TV customer base, adding 192,000
customers and reaching the 1m customer milestone.
Around 3m customers now take BT Sport directly from us. Including our
wholesale arrangements with Virgin Media in the UK and Setanta in
the Republic of Ireland, around 5m households can watch BT Sport.
We are pleased with viewing gures for BT Sport. Of our 33 Barclays
Premier eague matches in 201314, 27 reached over 1m viewers.
Over the Christmas period we achieved our peak viewing audience of
over 1.8m during the Manchester City versus iverpool xture.
Customer service delivery
BT Consumer RFT improved 5.4% this year. We had hoped for a greater
improvement and are making further investments in our customer
service operation, in particular how we respond to increased demand
at peak times. For example, we signed up over 1m customers to BT
Sport within the rst three months of launch which placed considerable
pressure on our contact centre resources, aecting the levels of service
some customers received.
During the year we introduced a new online portal. This enables
customers to review their bills, make changes to their account, access
their BT services (such as BT Cloud and email) and nd out about other
BT products and services using a single user ID and password.
We have also put in place interactive voice recognition software so that
customers who prefer to speak to us are able to get through to the right
advisor without having to navigate through as many options.
We are also making changes to provide a consistent customer experience
at all times and to meet changing customer expectations. There are a
number of initiatives we have committed to including
• a dedicated case management approach to customers with serious
problems and faults
• recruiting hundreds of new UK call centre sta  most recently in
South Shields, on Tyneside, and Accrington, ancashire and
• introducing new software that makes sure we call back customers
at the correct time.
Even with the challenges in our customer service operation, our
customers continue to recommend our products to others. Our advocacy
scores improved to an average of 39% in the fourth quarter this year
(Q4 201213 33%, Q4 201112 31%).
Cost transformation
Operating costs increased 11% due to our investment in BT Sport
and our improved revenue trend. Excluding BT Sport, operating costs
declined 5% which is consistent with the prior year.
This reects the benets of our cost transformation activities including
• renegotiating supplier contracts and improving our processes
• installing software into our home hubs which means our customer
service advisors can diagnose faults remotely. This helped save around
7,000 engineer visits and reduced calls into our customer service team
by over 300,000 and
• launching our new YouView set-top box which has a lower unit cost.