7 March 2008
You can download the BT Story as a PDF document 
This is a snapshot of BT today. It summarises BT’s strategy, gives a short description of some key projects and outlines the company’s view on a number of major policy issues. There are some useful facts about the company.
The recent history of BT is a story of business transformation. It is the story of a company that has grown and prospered through being competitive, customer focused and innovative, that has learned to compete and win against some of the world’s biggest companies to become a truly global operation.
BT serves customers in more than 170 countries. We have one of the largest IP networks in the world and we are adding one new city to that network every 7 days.
Five years ago BT decided to stake its future on meeting the demand for IT infrastructure and solutions among global organisations and the rapid expansion of broadband in the UK. Our strategy is to grow this “new wave” business whilst continuing to fight for our more traditional business in the UK.
From a standing start our “new wave” business was worth more that £7.4 billion in 2006/07 and now makes up over 39% of our revenue. Our new wave services are designed to help our customers make the most of the convergence that is bringing together networks and services, mobile and fixed products, media and communications:-
Broadband communications enable organisations to work seamlessly across time zones and borders. We are building the IT infrastructure for globalisation. We are helping businesses reach new markets and customers, and helping them improve their productivity and operational efficiency.
Around 20% of BT’s workforce is based outside the UK and we are delivering services to our customers in more than 170 countries.
Our target is to be:
We are making real progress:-
BT is a vocal champion of open standards and competition. To meet customer needs it is critical that barriers to entry are eliminated and all operators are treated equally. The protection of incumbent operators and national champions inevitably hurts consumers and the wider economy as choice is restricted, and innovation and investment are curtailed.
The UK has made great headway with broadband in terms of availability and take-up, and we must not lose this position of leadership. Already, more than half the homes in the UK are connected to broadband. Almost 10% of the British workforce works from home some or all of the time because of broadband. This number is increasing. Speeds of up to 8Mb are possible at all broadband exchanges.
BT is building the world’s first national IP network, recognising the critical part that collaboration and knowledge sharing will play in future wealth generation. Outside the UK the BT Global 21CN platform is now available in 167 countries worldwide.
In the UK the first customers went live on this new network in Cardiff in November 2006. We are replacing a number of existing networks and systems to provide for faster, more efficient, and cheaper delivery of new services. The 21CN programme will deliver four new strategic services during 2008:
Computing and all forms of communication are going wireless and will increasingly be available on the basis of what you want where and when you want it. Examples include:-
BT is proud of its record as a world class employer and its contribution to Corporate and Social Responsibility projects around the world.
BT can only compete and give European customers the choice they need if the regulatory environment is right. The European Commission is about to propose changes to the EU telecoms rules ensuring competition and consumer protection. BT will be campaigning for the ECommunications Directive to remain a force for competition and customer choice.
In the knowledge based economy, the ICT sector makes a major contribution to Europe’s competitiveness, currently accounting for around 42% of overall productivity growth. BT believes that competition at the service level must be allowed if this innovation and competitiveness is to flourish. Attempts to restrict service level competition will work against the future well being of the European economy and the European customer.
BT believes that investment is driven by competition, but for competition and investment to flourish, there must be consistent implementation and enforcement across the EU.
The key to more effective, and ultimately less intrusive, regulation is the strengthening of non-discrimination and transparency for all those wishing to use the incumbents’ networks.
BT is currently campaigning on the basis of these principles within the EU.
North America is a key market for the company. BT has had continuous presence since 1998, and now employs more than 4,300 people there. BT has recorded 50% revenue growth in the Americas for the past 5 years, and US headquartered companies generate approximately $1.2 billion per year in revenues for BT. BT serves more than 1000 customers in the US and Canada.
BT provides a range of solutions for multinational enterprises covering Convergence, Security, Enterprise Mobility, Contact Centre Solutions and IT Outsourcing and Transformation. Customers include companies such as PepsiCo, BMS, Jacobs Engineering, Microsoft and Continental Airlines.
To support its transformation agenda, BT has made 4 major US based acquisitions (INS, Counterpane, Radianz and Infonet) and acquired Comsat to provide increase coverage in Latin America.
The cost of access continues to be BT’s biggest regulatory issue. Since the major market consolidation in 2005 we have become entirely reliant on the incumbent operators to provide last mile access. The incumbents are enjoying a rates of return well over 80%, which make it almost impossible for BT to produce a competitive bid on a US only contract.
BT’s presence in the Asia Pacific region dates back to 1985. Currently, there are over 20,000 people directly and indirectly employed (including Global Services, joint ventures, vendors and contact centres) across 17 countries in the region. BT's key focus areas in the region are: to provide communications reach and ICT solutions to global multi-site corporations, to help local customers in Asia Pacific take their business to a global audience, and to provide traditional wholesale and next generation 21CN operator services to carriers and communications service providers. BT services over 500 multinational customers in Asia Pacific and has invested over US$100 million over the past three years in network expansion and now has 26 MPLS nodes in the region.
There is a significant diversity in communications regulatory frameworks in the Asia Pacific Region ranging from fully liberalised to closed monopolies. BT's policy focus in the region is to work with government and regulatory authorities to encourage effective regulatory frameworks which foster competition and enable market access to all players. BT actively encourages Governments to comply with their WTO and trade commitments in the telecoms sector and to remove any existing barriers to international companies entering the market.
|
Annual turnover |
£20.2 billion |
|
Profit before tax |
£2.5 billion |
|
EBITDA |
£5.5 billion |
|
Capital Expenditure |
£3.2 billion |
|
Total Exchange lines in UK |
28.1 million |
|
Wholesale Broadband connections** |
11.7million approx |
|
Employees |
106,000 approx |
|
'New Wave' revenue |
36% of total |
|
BT Global Services orders won |
£9.3 billion in last year |
|
Number of countries in which BT operates |
170 |
* results year to 31 March 2007
** at 30 September 2007
After more than 20 years of debate around the development of the most competitive communications environment in the world, a new regime was introduced by agreement between the regulator and industry as a result of Ofcom's Telecoms Strategic Review represented the most significant change in the industry since BT's privatisation in 1984. The key characteristic of the new regime was that BT’s access network became available to BT’s downstream operations and competitors on an equivalent basis and mechanisms were put in place to constantly monitor compliance with equivalence. The concentration of regulation on the wholesale access bottleneck allowed the rolling back of some unnecessary retail regulation. As BT demonstrates that its retail offers are now replicable by competitors, the remaining retail regulation should be removed. Control of the access network is with Openreach, a new business within BT, specifically set up to provide access network services and products on an equal basis to all the UK communications industry. Openreach is responsible for the bottleneck part of the network which includes the last mile access between the home and the business exchange and backhaul, the network which lies between the local exchange and the point of presence of competitors and BT’s downstream arms. It began operating in January 2006, has assets of £8 billion and employs 20,000 engineers.
Local loop unbundling is now taking off in the UK, with over 3.7 million lines. This offers an alternative route to broadband service if the service provider taking the product so chooses.
We are pleased with this growth and with achieving our voluntarily agreed target of 1.5 million lines. We look forward to the greater freedom to set our wholesale prices for broadband that will follow, to the benefit all those industry players who have chosen not to adopt unbundling as their route to market.
BT Vision, our next generation television service, was launched in December 2006. Using a single set-top box, the BT Vision service delivers to the TV set pay per view and subscription video on demand services, digital terrestrial 'free to air' channels, communications and interactive services - including in due course video telephony and instant messenger. The service is designed to be easy to use, bringing the next generation of TV technology within reach of a mass audience and putting the UK at the forefront of the development of digital TV delivery. There are now over 150,000 customers.
BT Vision's service covers the range of 'traditional' programming such as first run movies, older, classic library movies, high profile UK and US episodic television programming, children's programming, sports and music. The service gives customers the opportunity to watch programming with complete flexibility, not only in terms of when and what they watch, but also how they pay for it.
Vision customers can view programmes from the leading rights owners, providing a wide range of family entertainment, including Disney, Dreamworks, BBC Worldwide, NBC Universal, HBO, Paramount, Warner Music Group, and National Geographic.
We also offer BT Vision Sports, on the back of securing the rights to show Premiership football in a three-year deal starting in 2007/08, providing full matches from 10pm on the day of the game, as well as Setanta's new sports channel, Setanta Sports - all on a pay per view basis without the need for a television subscription.
VoIP services are being adopted by many companies and offer internet calling at low prices. We were the first in the field in the UK, with our BT Communicator product. BT offers a suite of VoIP products through BT Broadband Talk, including high-definition sound for delivering high quality internet voice and video calls, and free global PC-to-PC chat at any time of the day with BT Broadband Talk Softphone. BT now has a base of more than 1 million residential customers using VoIP services.
BT is delivering three major contracts to provide IT services to the NHS in England as part of the National Programme for IT (NPfIT), the world’s largest civilian IT project.
N3 is the name for the national broadband network that BT has developed and installed to link all NHS sites in England. BT is managing and enhancing this network, which provides more than a million NHS staff with fast and secure access to health applications at significantly lower cost. The N3 network reached 18,000 connections two months ahead of schedule in January 2007, and there are now over 20,000 connections – twice the number of its predecessor, N2. Recently the network was voice-enabled, offering the NHS the potential to reduce significantly the cost of telephony services.
In London, where BT is working with the NHS to modernise IT systems and services at hospitals, clinics and GP surgeries across the capital, it has now delivered significant capability to over 85 per cent of trusts. Clinicians are already benefiting from the switch from paper to electronic records, which they say is improving patient care by ensuring that they have fast, accurate, up-to-date and secure information around the clock – something that is vital in an emergency.
BT is also building the Spine, the national database of key information about a patient’s health and care, which forms the core of the NHS Care Records Service. Its messaging capability also enables the delivery of a range of other services being rolled out as part of the NPfIT in England, including the Electronic Transmission of Prescriptions and Choose and Book. In a significant step, the first set of patient NHS Summary Care Records have been created on the Spine. These records contain potentially life-saving information such as current medications, allergies and previous bad reactions to medicines. In time, authorised health care professionals will be able to access the Summary Care Records of patients they are caring for. This will be particularly useful if patients need care out of hours or in an emergency.
Good progress is being made on all of BT's NHS contracts. The project is critically important to the health service, and it has the potential to deliver enormous benefits to doctors, nurses and patients.
The most up to date deployment statistics are available from this website
We live in a global economy. Goods and services are traded across national boundaries. The internet and easy communications are key drivers for this development.
Many service jobs can now be performed remotely from the market in which their output is consumed. Much has been written about the 'outsourcing' of jobs in call centres to other parts of the world. These are just the first wave of jobs that are likely to be located in areas where costs are lower and relevant expertise is readily available. Nevertheless, in the case of call centres, BT's own business is still primarily located in the UK, with 32 out of 34 call centres being located here.
With broadband availability at almost 100% across the UK, there is no digital divide in terms of whether or not people can access the range of opportunities offered by the internet via the broadband network. There is, however, still a divide between those who have access to computers at home and those that do not. At the same time as broadband penetration has been rising, home computer penetration appears to have plateaued at around 60% of the population. BT works with partners across the UK to introduce people to the benefits of the internet and has provided 5,000 diverse community groups with an internet-ready PC and other kit via the BT Community Connections Award Scheme.
BT's services are designed around what our customers want. The UK has the most competitive communications market in the world and this fact means that many of the concerns around the net neutrality debate in the US are not relevant to the UK. In order to enable competition and innovation, all upstream network owners should allow any content to be carried on fair and equal terms, including services provided to their own downstream businesses. At the same time, as long as it is on a fair and equitable basis, these network owners can offer and charge for additional capabilities to enable differentiated service levels (such as guaranteed quality of service). Service providers need the flexibility to develop and implement different services and innovative services and charging models.
BT has been active on climate change for many years and has made a series of environmental pledges aimed at keeping the company at the front line of reducing carbon emissions.
We are pleased that the Climate Change Bill is not prescriptive as to ways and means at this stage. BT supports targets as a means of setting a framework, but it is important to deliver real changes to meet and, if possible, exceed those targets. The UK must use its capabilities in both the public and private sectors and develop new links between the academic communities, public authorities and industry to work to common goals. This should happen on a national, multi national and global basis. The UK should be at the forefront in encouraging appropriate responses globally, which will differ by location and social and economic circumstances.
Business must be ready to take a lead – as advocated in the recent report from the CBI Task Force led by Ben Verwaayen, BT’s CEO.
Our strategy for carbon cutting entails:
Specifically, we have pledged to:
On top of our ‘green energy’ contract, which is saving the equivalent amount of carbon as that resulting from the electricity consumption of over 300,000 households - roughly the population of Liverpool and Cardiff combined - every year, BT has recently announced plans to develop wind farms aimed at generating up to 25 per cent of its existing UK electricity requirements by 2016. The wind farm scheme represents the UK's biggest corporate wind power project outside of the energy sector. The project, costing up to £250m, will bring together third party funding and renewable energy partners to safeguard future supplies of clean, green energy for BT.
BT is one of Britain’s biggest consumers of electricity, with an annual requirement of around 0.7 per cent of the UK’s entire consumption. Subject to planning consent and suitable sites being secured, BT’s wind farms would have a total installed generating capacity of around 100MW by 2012, equivalent to around fifty wind turbines, with a further 150MW targeted by 2016. This would prevent the release of 500,000 tonnes of CO2 each year compared with coal generation.
