BT 2016 Annual Report Download - page 26

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Who we are
We’re one of the world’s leading communications services
companies.
Where we operate
We’re based in the UK but we serve customers across 180
countries (see page 59).
How we make money
The main output of our business is our portfolio of communications
products and services. We make money by selling these in the
UK and around the world through our customer‑facing lines of
business.
We sell through a range of channels including online, contact
centres and account managers. And, following our acquisition
of EE, we now have around 560 EE shops in the UK.
Our revenue is mostly subscription or contract‑based. Individuals,
households and SMEs pay for standalone or bundled services,
typically on 12 to 24‑month contracts. Large corporate and public
sector customers usually buy managed networked IT services on
contracts spanning several years. Our wholesale customer contracts
range from one month in length for regulated products, to five
years or more for major managed services deals.
But it’s not just about the money
There’s much more to what we do than just making money.
What we do matters. We help millions of people communicate,
be entertained, do business and generally live their lives. We help
our customers reduce their carbon footprint. And we contribute
directly to communities and the health of the UK by providing
jobs, working with suppliers and paying tax, and through our
employees’ volunteering activities.
All of which contribute to the strength of our brands – which can
inuence whether a potential customer buys from us or one of
our competitors.
Our approach
Our focus on delivering superior customer service, transforming
our costs and investing for growth is central to what we do.
They are key business activities. Better customer service means
that we spend less time and money putting things right. These
cost reductions, combined with savings from working more
eciently and the cash we generate from sales, mean we can
invest in the future of our business.
BT Group plc
Annual Report 2016
Some investments, such as sports rights, have a lifespan of just
a few years. Other investments, such as our fibre broadband
network, are much longer term and can have ‘pay‑back’ periods
stretching to more than ten years.
Delivering our strategy is as much about how we do things, as
what we do. That’s why being a healthy organisation (see page 33)
and living our values (page 31) are so important to us. And that’s
why our people are key to our success.
What sets us apart
We have a strong combination of people, technology, networks
and other physical assets that set us apart from our competitors.
Our research and development (R&D) activities are crucial to us –
and to wider society. We have pioneered innovation in the telecoms
arena, and our R&D supports new ways of doing things and
advancements in our technology.
Importantly, we have the financial strength to invest in these
areas to stay ahead of the competition.
A exible and sustainable business model
Communications markets are dynamic and very competitive,
particularly in the UK. There are risks and opportunities. Our
Enterprise Risk Management framework (see page 46) helps us
identify and mitigate the challenges and risks we face. And we
do an annual materiality review to understand the societal and
environmental issues that are important to our stakeholders.
We have a exible and sustainable business model, enabling us
to anticipate and respond to changes in our markets. It underpins
our assessment of the future prospects and viability of the Group
(see page 54).
We see more and more demand for our products and services
because they play such an integral role in modern life. We
use ‘insight’ teams to make sure we stay in tune with market
developments and customer expectations. And we use governance
committees, such as the Design Council, to make sure we’re making
the right investments. So we’re confident that we’ll be able to
deliver value over the short, medium and long term.
The Design Council is a sub‑committee of the Operating Committee
(page 26). It normally meets monthly. It is collectively responsible for
aligning our capital investments in our networks, systems, platforms and
products so that they are directed towards achieving our overall purpose
and strategy, serve the needs of all of our customers and are delivered
in a cost‑eective manner.
Design Council