Priorities for the
year ahead

Q&A with Ian Livingston

Q. It has been a challenging first year in charge of BT � what have been the major features for you?
Ian Livingston: Let�s start with the positives. Despite the difficult economic conditions, three of our principal divisions � BT Retail, BT Wholesale and Openreach � have all delivered ahead of expectations. Together they have recorded their best performance for more than five years. However, the performance of BT Global Services has been unacceptable and we have taken steps to fix this.

Another important milestone was committing to make the biggest ever investment in super-fast broadband in the UK. We will spend �1.5 billion making the service, delivered over fibre-optic cable, available to 40 per cent of the homes in Britain by 2012 providing that the regulatory conditions allow us to make a proper return. This will offer customers speeds of up to 100 Mb/s, allowing them to simultaneously run multiple bandwidth hungry applications like HD video. This is not just an important investment for BT, it is a significant development for the UK and its future as a knowledge-based economy.

Finally, I am really proud of the improvements we have made in the quality of our customer service. As an example the time it takes us to repair a network fault has been halved in the last three years. We know there is much more to do, but in a highly competitive market I am certain that being known for outstanding customer service can be a key differentiator for BT.

�Even in the most difficult economic times, a diverse and agile business like ours will find opportunities to grow and improve the services we deliver to our customers�

Q. Have the problems in BT Global Services been resolved?
IL: First of all, I want to be clear that the issues in BT Global Services are not principally to do with the recession or a lack of demand for our services. The problem has been a failure to control costs properly. The scale of the issue only became clear during the course of the year, but we acted quickly to take the tough decisions that will turn the business around. These include, putting a new management team in place, urgently addressing our cost base and lowering the expected financial value of some key contracts. As a result of our actions, I believe the division is now in a position to return to profitable growth.

BT Global Services has a very healthy order book, and during tough economic times our ability to help customers reduce their own costs makes our proposition compelling. At the same time, we continue to improve the quality of the services we deliver. The independent research group, Telemark, recently rated BT Global Services the best operator in the world in its Customer Satisfaction Index with the highest score ever awarded.

Q. What are the major opportunities for the business?
IL: Even in the most difficult economic times, a diverse and agile business like ours will find opportunities to grow and improve the services we deliver to our customers. For example, we aim to build on the success of BT Conferencing, which is strongly growing both revenue and profits and is now the world�s biggest provider of video conferencing.

Another example is our Business One Plan service, which is the UK�s first triple play of landline, mobile and broadband for small and medium-sized businesses. It launched three years ago and in 2009 added free calls within an organisation � even between offices and mobile workers � a significant saving. Over a million business lines are now using this service and more than 2,500 new customers sign up each week.

Our ability to provide world-class, networked IT services for multi-national organisations remains an important part of our portfolio, while the roll out of super-fast broadband in the UK will carry with it a host of exciting new possibilities.

Q. Managing BT�s costs is clearly important. Tell us about the right first time initiative.
IL: It is vital we manage our costs. When we focus on customer service and get things right first time, we not only make our customers happy, we reduce our costs as well. That�s why our goal is to get our service right first time. When we do this the number of people contacting our call centres falls and so does the number of engineers we need to send out to fix things. This is just as true for our biggest corporate customer as it is for a family buying broadband for their home. We have made real progress in the past twelve months. Service levels are the best they have ever been on a number of measures, and there�s much more we can achieve in the year ahead.

Q. How important is it for BT to be an international business?
IL: We are a global business and we serve global customers � we service 170 countries and employ around 20,000 people outside of the UK. We need to be wherever our customers want us to be, delivering a consistent service regardless of location. We also want to pick the world�s best brains. Our main research and development centre based in Adastral Park is home to highly skilled researchers and academics from all over the world. We have research teams based in Malaysia and in China, as well as links to 30 world-leading universities including MIT/ Cambridge and University College London.

Q. How important is innovation and developing the technology of the future to BT?
IL: Pioneering innovation and research and development are vital to us. Last year we spent �1.25 billion, the third highest spend of any British company. This is an investment in our future as it helps us to reduce costs, develop new products and improve customer service.

Q. What are your top priorities going forward?
IL: When I took over as CEO I said I had three priorities, and I am sticking with them. They are to provide excellent customer service; to continue investing in networks, systems and services including super-fast broadband; and to make BT a more agile company so that we can deliver faster, better, great value services to all our customers � from major global organisations, through the small business sector, to the millions of families who we are proud to serve every day. My aim is for BT to be a better business with a better future.

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