During the past two years, the success of
our debt reduction programme enabled us to resume paying
dividends to our shareholders, spend money in the pursuit of
new, profitable revenue opportunities and invest in the network
of the future.
In the past two years, our debt has been
reduced from £27.9 billion as at 31 March 2001 to £9.6 billion
as at 31 March 2003, as a result of the sale of non-core assets,
such as our stake in Cegetel, and increased cash generation.
We also achieved greater integration of BT
Global Servicesí European businesses through product
harmonisation, network and customer
service centre consolidation and people realignment. And by the
end of the 2003 financial year, all major European operations in
BT Global Services had become EBITDA (earnings before interest,
taxation, depreciation and amortisation) positive.
As a result of continuing to attract
customers by driving up service levels, enhancing the customer
experience and learning from the success of packages such as BT
Together, we have been able to boost our drive in new-wave
markets, specifically those for broadband, mobility, ICT and
All parts of BT have rigorous cost
reduction targets. Our BT Retail business, for example, is in
year two of a £800 million cost transformation programme, and
our BT Wholesale business is in the second year of a £650
million cash cost reduction programme. Both programmes are
focused on efficiency and working smarter, and both are on track
for delivery by 2005.
And, of course, we have challenging
financial targets relating to all the new things we are doing as
discipline is not just about rigorous cost control - itís
also about targeting investment so that it best supports
our strategy. We have to make a compelling case for
every new investment we make. And we have to continue to
do the things we have always done cost effectively, so
that we create the scope to do new things as well.