BT's strategic priorities

16 November 2010

In May, Ian Livingston, chief executive of BT, set out his three year plan for the company. He explained how he will take BT forward by investing in areas such as fibre-based broadband, television and services for global companies in the Asia Pacific region. He also re-emphasised BT's five strategic priorities: driving broadband-based customer services, being the 'brand for business' for UK SMEs, making BT Global Services a global leader, being the wholesaler of choice and being the best network provider. Here he tells us more.

What impact does improving customer service have on BT's financial performance?

By improving customer service and reducing the cost of failure, BT has cut its costs over the last two years. The improved efficiency is freeing up resources to allow us to accelerate our investment plans. From 2010/11 to 2012/13, we expect to see improved underlying revenue trends with revenue growing in 2012/13.

We are investing a further £200 million in 2010/11; mainly in the areas of fibre, enhancing our TV services, introducing other new consumer services and building on opportunities in BT Global Services, particularly in the Asia-Pacific region.

BT has made a significant investment in the roll out of fibre. What plans do you have to extend coverage in the UK?

Assuming an acceptable environment for investment, we have committed to extending our fibre roll out to around two-thirds of UK premises by 2015. This total investment of around £2.5 billion, one of the largest private sector investments in Europe, will be managed within BT's current levels of capital expenditure.

Extending fibre broadband beyond the two-thirds, to those remote and rural areas that make-up the so-called ‘final-third’, is very challenging but we are determined to push the boundaries and are actively seeking opportunities to do just that. Ordinarily it would not be commercially feasible to provide fibre to these areas but we are keen to work in partnership with public bodies (local/regional/national authorities) and other partners to bring the advantages of next generation broadband to these communities - Our partnerships in Northern Ireland and Cornwall clearly demonstrate what is possible when public and private sectors work together. It is important to highlight that all communications providers will have open access to this future-proofed infrastructure, driving greater competition and choice for all.

Further information on BT’s Next Generation Broadband programme can be found at www.bt.com/ngb

What will this mean to consumers and businesses?

Our programme will make the UK one of the best connected countries in the world for next generation broadband. The roll out is already under way; four million premises are due to have access to fibre broadband by the end of 2010 and we are making steady progress towards that target having already passed 3m homes and businesses.

In October we launched the "Race to Infinity", a nationwide survey that will enable us to map demand for fibre across the UK; we are running the survey as a competition, promising to enable the five exchanges with the highest demand for fibre broadband - This could see commercially viable exchanges brought forward to the front of the queue or other exchanges added to the deployment plans. We’ve also pledged to engage with communities who don’t win in the race, but who have gathered 75 per cent of possible votes for their exchange, to explore other opportunities to bring fibre to their area. The survey, the first of its kind, will run until 31 December; we want to hear from people in towns and villages across the UK and so we encourage you to take part and register your interest.

As the network is ‘open’, the expansion of BT's network will bring competition and consumer choice. Such competition is beneficial for consumers and businesses as it helps to ensure that prices are kept as low as possible, reinforcing the UK's position as one of the best value countries for communications.

Television is an exciting growth industry. How will BT capitalise on this opportunity?

Television is a potential growth area for us and one that will benefit from the roll out of faster broadband. We will offer a range of new television services ranging from a huge choice of on-demand programming and free-to-air high definition (HD) programmes to new interactive services. In addition, following Ofcom’s ruling which obliged Sky to wholesale Sky Sports 1 and Sky Sports 2 at regulated prices, we launched both channels in time for the start of the 2010/11 football season. With regard to the future, we believe that our participation in “YouView” (formerly Project Canvas) will ensure that we will have one of the most advanced TV platforms in the world.

But it's not just about TV, it's about broader entertainment. We've bought exclusive rights to OnLive® – an interactive video gaming service – that can be played through TVs and bundled with broadband.

You've had some problems with BT Global Services. How is the business performing now?

The division has made good progress and we expect it to become operating cash positive in the 2011/12 financial year. In fact the business won deals worth £6.6 billion in the last financial year. BT Global Services will be investing in the fast growing Asia Pacific market where it already has a strong market presence. Globalisation is here to stay and we can play a big part in both helping Asian multinationals to expand and in helping other companies to establish operations in the region.