BT Business Graham Sutherland, CEO - btplc.com new BT Business organisation The new organisation...

BT Business

Graham Sutherland, CEO

BT Group plc

© British Telecommunications plc

2

Agenda

Business description

Market context

Strategic investments

Core business

Channel reach

Case study – Anchor Trust

Key messages


3

Our Journey

2001-2004

• 2005 TNS & Skynet

acquired (now iNet)

• 2006 acquired Dabs.com

• 2007 acquired Lynx and

Basilica

• 2001 BT Business formed

• 2004 BT Mobile launched

(MVNO with Vodafone)

2005-2008 2009-2013 2013

• 2005 BT Ireland created

(formerly ESAT BT)

• 2008 DETI investment in NI

started

• 2008 Fresca acquired

• 2008 Wire One acquired

BT

Bu

sin

es

s • 2009 Lynx & Basilica

integrated to form

Engage IT

• 2010 Fibre launched

• 2012 Plusnet for

Business launched

• MVNO deal with

EE

• 4G spectrum won

• 2002 BT Openzone

launched

• 2004 Expedite acquired

from NBS

• 2009 RoI Consumer

business sold to Vodafone

BT

Ire

lan

d

BT

En

terp

ris

es

• 2002 ESAT Group (bought

in 2000) renamed ESAT BT

• NI Consumer

business

separated

• Exclusive

partnership with

Dolby

• 2013 Tikit acquired

• 2013 BT WiFi rebrand


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The new BT Business organisation

The new organisation allows greater focus on small, medium and corporate mid-

market business customers in the UK and Ireland

Brings IT Services businesses together to realise synergies and drive growth

IT Services

• BT iNet

• BT Engage IT

• BT Business

Direct

• BT Tikit

• BT Expedite &

Fresca

UK Corporate UK SME BT Ireland BT Conferencing

Small to mid-market

SMEs, plus specific

target markets for

Enterprises

SMEs & Public Sector in

NI, Public Sector,

Corporates, & Wholesale

in RoI

UK, foreign domestic

and global businesses

UK top-end SME

businesses and

corporate mid-market

• UK Corporate (mid-

market) Sales

• Custom Solutions

• UK Fleet

• SME Sales

• Enterprises Core

• Enterprises Ventures

• Business

• Wholesale • BT Conferencing

Core products

• Voice

• IP / UC

• Broadband &

Fibre

• Networking

• Mobile &

WiFi

Po

rtfo

lio

S

ale

s

Cu

sto

me

rs


5

Calls & lines Broadband

Networking Switch

E.g. Virgin Media, TalkTalk, Vodafone, O2, EE,

Verizon, Daisy, resellers

E.g. Virgin Media, TalkTalk, Daisy, XLN Telecom, Spitfire,

Zen Internet

E.g. Vodafone,

Virgin Media, TalkTalk,

Easynet, Colt,

E.g. Verizon, Azzurri, Claranet, Vodafone, Maintel

Competitive landscape

The UK business market

Leading player in fixed services

– 52% share of business calls and lines1

– 30% share of business broadband internet

access2

– 21% share of fixed network services2

Cross-selling opportunity in mobile and IT

services

Large customer base and greatest UK reach

– c. 1m SME customers

– A strong and trusted brand

– Sales channels across all segments, with

national coverage

Very fragmented but competitive market

Market size2 £3.9bn £4.8bn £12.9bn

UK Business market size

1. Revenue market share, from ‘Ofcom Telecommunications market data tables, Q1 2013’

2. Revenue market shares and market sizing from IDC custom marketing sizing model (for businesses with <1000 employees) and BT Business revenue data

38% 2% 2% 0%

20%

40%

60%

80%

100%

Fixed voiceand data

Mobile voiceand data

IT services(addressable

market)

Mark

et share

%

BT market share


6

Provides audio, video and web conferencing in

170 countries in an £8.9bn market

No. 4 player worldwide for audio1

No. 2 for audio in Europe1

A leading player in Europe for video

Ireland and Conferencing markets

Largest fixed communications provider for

SMEs in NI

Leading networked IT services partner for

government and major customers in NI and RoI

Second largest wholesale provider in RoI

Major competitors in RoI are Eircom, Vodafone,

Colt, AT&T and Verizon

BT Ireland BT Conferencing

The market opportunity for conferencing services2

£0.6bn £0.6bn

£2.4bn

0

1

2

3

RoI Business(>100

employees)

RoIWholesale

RoI IT Services

Mark

et re

venue (

£bn)

Sources: 1. Wainhouse Research

2. BT GS estimates for FY 2012/13 based on data from Wainhouse Research and Gartner

Size of market currently addressed

Source: Market sizing data from IDC (customised for BT) for the

product markets in which we are currently active

Asia-Pacific

£1,626m

W. Europe (ex. UK / Ireland

£1,053m

North America

£4,341m

UK & Ireland

£605m,

C. & E. Europe & Russia £401m

Latin America

£241m

MEA

£599m

Worldwide Total

£8,864m


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Our beliefs on market trends

Customers

Competitive

environment

Demand for data will grow, driving demand for bandwidth and migration to fibre

Wireless increasingly important as the distinction between fixed and mobile erodes

Increasing move to cloud for applications, data processing and storage

Technology

Customer service demands rising as connectivity becomes increasingly key to business life

Customers better informed, demanding excellent delivery, service and competitive pricing

Increasingly interested in opportunity for their business from converged propositions

Decline of fixed voice, with migration to IP voice over next few years

Increasing competition from ‘over the top’ and IT service providers in core telecoms

Industry consolidation within and across sub-sectors and countries will continue


8

Our strategic investments Our strategic investments align with four of the key strands of BT’s overall investment

priorities

Foundations in place for an exciting future

IT services

IT services

Delivering on our strategy

Fibre

TV & Sport

Mobility

4 G

High-growth

regions


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Marketing and outbound sales investment to

communicate benefits of BT Infinity for

Business and drive penetration

Competitively priced voice and ‘BT Infinity for

Business’ bundles

Major drive in Northern Ireland, where >90% of

homes and premises now passed

On-going development of new business

services that will leverage fibre

Q12011/12

Q2 Q3 Q4 Q12012/13

Q2 Q3 Q4 Q12013/14

Q2

BT Business fibre customers

(including NI)

Fibre is still growing strongly

Strategic investments fibre


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Strategic investments mobile and WiFi

New MVNO deal agreed with EE

– will make it easier to bundle

Converged fixed and mobile solution being

developed

– provides a single platform for all voice devices

4G spectrum plans well underway

– ‘inside-out’ strategy, focused on indoor and

outdoor small cells, supporting voice, video

and data

– leverages our WiFi footprint – the largest in the

UK

Machine to Machine specialist opportunities

being addressed

180

200

220

240

260

280

Mar2010

Mar2011

Mar2012

Mar2013

Mobile

subscribers

(k)

We have grown our mobile base

4G focus on urban / indoor capacity

Picocells/Femtocells Micro/small cells

500m 100m 50m


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Strategic investments IT services

Comprehensive portfolio of IT services

Also two specialist businesses addressing

retail and legal sectors

Greatest focus on higher margin, annuity

revenue

− breadth of portfolio also important for pull-

through

Investing in data centres, hosting and cloud

to leverage networking capabilities

Potential to pursue additional vertical

specialisms if opportunities identified

Cisco specialist for networking

and hosting infrastructure

Specialist services for legal

and accountancy firms

Specialist services for the

retail sector

Sales and distribution of IT

equipment to volume segment

Leading HP and Microsoft

specialist

Our IT services businesses

-5%

0%

5%

10%

2011/12 2012/13Y

oY

revenue

change

IT services revenue is growing


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Strategic investments BT Conferencing

Aim to be the world’s leading conferencing

provider

BT MeetMe with Dolby Voice launched in

October to grow and protect our audio

business

– exclusive, high quality audio with ‘spatial

separation’ of participants

Rebalancing video business from low margin

kit to managed revenues

Targeting growth geographies, including

APAC, LATAM and Canada

We have a broad scope of services

Video

Streaming

Web

Audio

Solution

design

Integration and

access

Implementation

Services

Training and

adoption

In Life

Management


13

Strong position in legacy voice services

Competitively priced voice and broadband

bundles

Targeted pricing initiatives that balance

acquisition and margins

Strategic investments will drive further cross-

sell opportunities with voice

-500

-400

-300

-200

-100

0

2009/10 2010/11 2011/12 2012/13

YoY

Net

line losses (

k)

BT line loss is improving Call minutes continue to decline

Call minutes are increasingly migrating to

mobile, email and VoIP

BT Business minutes are declining slower

than the market

We are developing new IP voice and FMC

solutions, which can be bundled with other

services

-15%

-10%

-5%

0%

2011/12 2012/13

YoY

declin

e

Market

BT Business

Decline in traditional voice minutes Annual line losses for BT Business

Source: Ofcom data and

BT Business’ own data


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Growth in broadband and networking services

Bundled voice and broadband packages

Dual brand with BT Plusnet for Business to

extend market reach

Free business hub, free installation and free

access to BT WiFi

Our broadband base is still growing Leader in network services

Leading player in network services,

including dedicated internet access and

IPVPNs

Help customers to migrate to higher

bandwidths and more cost effective,

flexible solutions, particularly Ethernet

– Ethernet underpins growth in IP Voice and

cloud services


15

Unparalleled channel reach in the UK

bt.com for online sales

BT Business sales

– telesales at 7 UK locations

39 Local Business Partners

– exclusively selling BT products

27 Authorised BT Partners and their

appointed resellers

– independent specialists

Specialist sales teams for niche products

SME customers Corporate mid-market

Desk-based account managers

Field-based account managers

Custom Solutions for end-to-end

solutions

− a centre of excellence in managed network

services

Product experts and bid managers to

support sales

Specialist sales teams for niche products


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And scale in Ireland and in global Conferencing

Two sales organisations: Ireland

Business (NI and RoI) and Wholesale

(RoI)

Networked IT services team with over

500 IT specialists

– works with major client base in NI and

RoI, including both governments

Dedicated account teams manage

wholesale clients

Telesales and online sales in NI for

smaller SMEs

Ireland Conferencing

Channels to market split geographically

– Europe

– APAC / AMEA

– North America

– Latin America

BT Conferencing sales teams also work

with BT Business and BT Global

Services

– Major MNCs account managed by BT GS


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Anchor Trust case study

England’s largest not-for-profit provider

of housing and care for the over-55s,

with £264m turnover

Offers purpose-built retirement

properties and specialist care for over

35,000 people at over 1,000 UK

locations

Premises are a mix of offices, care

homes and support of home workers

Overview of Anchor Trust What BT is delivering

Professional services to redesign IT

Infrastructure

Single point of contact service desk

PC management and support

Site infrastructure support

Dual data centre hosting services under

the new IaaS model

Replication and Workplace Recovery

Services


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Anchor Trust case study video


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Key messages

Leading player in fixed telecoms in the UK SME and corporate mid-

markets

Key advantages include strong brand, breadth of portfolio and channel

reach

Opportunity to leverage these to drive growth in mobile and IT services

Cost transformation and improvements in customer service continue to

be important

Key investments include, IP voice, fibre, 4G mobile, cloud and data

centre services

New organisational structure improves focus on growth opportunities

and synergies

Q&A

BT Group plc

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BT Business Graham Sutherland, CEO - btplc.com new BT Business organisation The new organisation...

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