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Changes
in technology are leading to changes in people’s
behaviour. People are, for example, spending
more time on the internet and sending
information by email, where once they would have
used the phone or fax.
This
transformation is putting converged services at
the heart of our offering, enabling our
customers to communicate wherever they happen to
be.
As
we move from a narrowband to a broadband world,
we are offering a new mix of products and
services in new markets – ICT, broadband,
mobility and managed services.
“Technology
substitution” is also having a significant
impact in our traditional voice markets where
fixed-to-fixed voice revenues were down in both
the consumer and business markets.
This
is both a challenge and an opportunity. We have
to respond to those changes in technology, the
market and behaviour, at the same time as
working to accelerate them. We have to be
absolutely focused on defending and reinventing
our traditional markets, through imaginative
sales and marketing, through delivering the
right products at the right prices. And we have
to follow our customers where they want to go,
offering them new, flexible services that match
their changing personal and business needs.
Customer
satisfaction
Our passion for customers is at the heart of
everything we do.
A
year ago we launched our brand promise to make
every customer experience “simple and complete”.
This is essential to driving down customer
dissatisfaction, which remains a critical goal
for us. In the 2004 financial year, we reduced
dissatisfaction by 22%.
As
customer dissatisfaction is driven down, so is
the cost of failure. A great customer experience
– and cost savings – really can be two sides
of the same coin. Getting things right for
customers the first time keeps them loyal,
contributes to cost effectiveness, and boosts
our reputation.
New
wave business
ICT used to be an aspiration; it’s now a
reality. We had a superb year with ICT orders
worth more than £7 billion – up 59% on just a
year ago. The three deals we signed with the NHS,
for example – expected to be worth more than
£2.1 billion – indicate our strength in this
market.
I
believe that we have something very special to
offer – the ability to act as “the telco
inside” our customers’ organisations. We
offer our customers – businesses and other
large organisations, including local and
national government – the chance to enhance
their productivity, through expert management of
their information systems, desktop to desktop.
And we
have a full range of network-centric ICT
solutions depending on what our customers want
– from full service assurance across their ICT
infrastructure, through monitoring levels of
service throughout their operations, to
validation of their networks, data centres and
desktops.
Broadband
It’s been a tremendous year for broadband as
well. People were sceptical when we said we’d
reach two million DSL wholesale lines by the
summer of 2004. What nobody expected was that we
would achieve two million in February 2004. As
at 14 May 2004, we had 2.45 million – and
climbing. The UK is now moving towards the top
of the broadband league.
And
our programme for upgrading our exchanges to
broadband has been extremely effective in
bringing the benefits of this amazing technology
to some of the remoter parts of the UK. In April
2004, we announced a roll-out plan that will
bring broadband to 99.6% of the UK’s homes and
businesses.
The
announcement, in May 2004, that we will redesign
and reduce the cost of our local loop unbundling
product, should encourage investment in
broadband infrastructure and promote innovation.
It’s a major move towards the
telecommunications market of the future.
In the
consumer broadband market we’ve teamed up with
Yahoo! to offer compelling, world-class content
and launched a suite of new products that will
enable customers to get the most from broadband.
A couple of years ago we were among the first to
offer a broadband connection for less than £30
a month. This year we’ve broken the £20
barrier, with an entry-level broadband product
for just £19.99 a month.
Mobility
We also stepped back into the consumer mobility
market with BT Mobile Home Plan and we
established the high street presence that will
enable us to offer converged products and
services in the future.
Again,
our goal is to offer communications flexibility,
enabling our customers to communicate the
information they choose, in the way that they
choose, using whatever communications device
they choose.
In
May 2004, we announced that we will be working
with Vodafone UK to dismantle the barriers
between fixed and mobile services, by offering
fully converged, fixed/mobile services in the
business and consumer mobile markets. Our
customers will benefit from being able to
communicate and access the same information and
services however and wherever they want; whether
they are connected to a fixed network or on the
move.
For
our larger business customers we also offer
convergence, managing their fixed and mobile
communications seamlessly.
And
the growth of Wi-Fi (wireless broadband)
suggests that it could well be one of those
technologies which rapidly becomes a part of our
customers’ lives. Once they’ve experienced
it, they find it hard to imagine life without
it.
Traditional
business
Given the impact of new technology and
increasing competition, voice call volumes may
no longer be the absolute guide to the health of
the company that they once were, but they remain
a fundamental part of our business and we are
bringing an innovative approach to product
development, sales and marketing in the voice
calls business. Robust defence doesn’t mean
retreat, it means seizing new opportunities.
BT
Together, for example, has been a major success
with around nine million customers. During the
year, we announced that we will be abolishing
the standard rate for our existing customers
from 1 July 2004, and launched an enhanced range
of option packages. In the business calls market
BT Business Plan has had similar success –
customer numbers were up from 20,000 to 175,000
in the year. And BT Local Business is
demonstrating that getting close to our
customers can deliver significant revenue
benefits.
Cost
leadership
Cost leadership is vital to the accelerating
transformation of BT.
We
can and must operate as efficiently and
effectively as possible, benchmarking our costs
against those of other European
telecommunications companies. Most recently,
these comparisons showed that our costs are
better than average for large telecommunications
companies but that we still have some way to go
to achieve best-in-class costs. In the last
three years, we’ve made major reductions in
the costs of our operations and we’ve
identified a further £1 billion that can be
achieved.
Our
Hands Off Access Network (HOAN) project, for
example, is helping to improve network
efficiency by minimising manual network
intervention and reducing the need for exchange
visits.
This
is not about cutting corners or compromising on
service, but about finding innovative,
cost-effective new ways to meet customers’
needs.
And,
over the next few years, we’ll be creating the
21st century network. We are transforming our
networks, converging them on to a modern,
single, multi-purpose platform that will enable
us to reduce costs, meet customers’ changing
needs and improve customer satisfaction. The
21st century network will offer higher
performance in return for lower operating costs.
Our
people
Of course, without the commitment and hard work
of BT people, our strategy would be nothing more
than words on the page.
A
year ago, we introduced our new values –
trustworthy, helpful, inspiring,
straightforward, heart. Since then, our people
have translated those values into action,
driving down customer dissatisfaction, defending
the traditional business and winning business in
new markets.
We’re
very proud of what they’ve done and of what
they are continuing to do.
Ben
Verwaayen
Chief Executive
19 May 2004
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helping
to build Broadband Britain;
