BT Group plc. BT Business Graham Sutherland, CEO

Transcription

1 BT Group plc BT Business Graham Sutherland, CEO

2 Agenda Business description Market context Strategic investments Core business Channel reach Case study Anchor Trust Key messages 2

3 BT Enterprises BT Ireland BT Business Our Journey BT Business formed 2004 BT Mobile launched (MVNO with Vodafone) 2005 TNS & Skynet acquired (now inet) 2006 acquired Dabs.com 2007 acquired Lynx and Basilica 2009 Lynx & Basilica integrated to form Engage IT 2010 Fibre launched 2012 Plusnet for Business launched MVNO deal with EE 4G spectrum won 2002 ESAT Group (bought in 2000) renamed ESAT BT 2005 BT Ireland created (formerly ESAT BT) 2008 DETI investment in NI started 2009 RoI Consumer business sold to Vodafone NI Consumer business separated 2002 BT Openzone launched 2004 Expedite acquired from NBS 2008 Fresca acquired 2008 Wire One acquired 2013 Tikit acquired 2013 BT WiFi rebrand Exclusive partnership with Dolby 3

4 Customers Sales Portfolio The new BT Business organisation The new organisation allows greater focus on small, medium and corporate midmarket business customers in the UK and Ireland Brings IT Services businesses together to realise synergies and drive growth Core products IT Services Voice IP / UC Broadband & Fibre Networking Mobile & WiFi BT inet BT Engage IT BT Business Direct BT Tikit BT Expedite & Fresca BT Ireland UK Corporate UK SME BT Conferencing Business Wholesale UK Corporate (midmarket) Sales Custom Solutions UK Fleet SME Sales Enterprises Core Enterprises Ventures BT Conferencing 4 SMEs & Public Sector in NI, Public Sector, Corporates, & Wholesale in RoI UK top-end SME businesses and corporate mid-market Small to mid-market SMEs, plus specific target markets for Enterprises UK, foreign domestic and global businesses

5 Market share % The UK business market Leading player in fixed services 52% share of business calls and lines 1 30% share of business broadband internet access 2 21% share of fixed network services 2 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 size 2 3.9bn 4.8bn 12.9bn 100% 80% 60% 40% 20% 0% UK Business market size Competitive landscape Calls & lines E.g. Virgin Media, TalkTalk, Vodafone, O2, EE, Verizon, Daisy, resellers E.g. Vodafone, Virgin Media, TalkTalk, Easynet, Colt, 38% 2% 2% Fixed voice and data Mobile voice and data BT market share IT services (addressable market) Broadband E.g. Virgin Media, TalkTalk, Daisy, XLN Telecom, Spitfire, Zen Internet E.g. Verizon, Azzurri, Claranet, Vodafone, Maintel 5 Networking Switch 1. Revenue market share, from Ofcom Telecommunications market data tables, Q Revenue market shares and market sizing from IDC custom marketing sizing model (for businesses with <1000 employees) and BT Business revenue data

6 Market revenue ( bn) Ireland and Conferencing markets BT Ireland 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 Conferencing Provides audio, video and web conferencing in 170 countries in an 8.9bn market No. 4 player worldwide for audio 1 No. 2 for audio in Europe 1 A leading player in Europe for video The market opportunity for conferencing services Size of market currently addressed 2.4bn North America 4,341m UK & Ireland 605m, W. Europe (ex. UK / Ireland 1,053m C. & E. Europe & Russia 401m 1 0.6bn 0.6bn Asia-Pacific 1,626m 6 0 RoI Business (>100 employees) RoI Wholesale RoI IT Services Source: Market sizing data from IDC (customised for BT) for the product markets in which we are currently active Latin America 241m MEA 599m Worldwide Total 8,864m Sources: 1. Wainhouse Research 2. BT GS estimates for FY 2012/13 based on data from Wainhouse Research and Gartner

7 Our beliefs on market trends Demand for data will grow, driving demand for bandwidth and migration to fibre Technology Wireless increasingly important as the distinction between fixed and mobile erodes Increasing move to cloud for applications, data processing and storage Customer service demands rising as connectivity becomes increasingly key to business life Customers Customers better informed, demanding excellent delivery, service and competitive pricing Increasingly interested in opportunity for their business from converged propositions Competitive environment 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 7

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 Fibre IT services TV & Sport IT services Mobility 4 G High-growth regions 8 Delivering on our strategy

9 Strategic investments fibre Marketing and outbound sales investment to communicate benefits of BT Infinity for Business and drive penetration Fibre is still growing strongly BT Business fibre customers (including NI) 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 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011/ / /14 9

10 Mobile subscribers (k) 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 We have grown our mobile base Mar 2010 Mar 2011 Mar 2012 Mar G focus on urban / indoor capacity 50m 100m Picocells/Femtocells 500m Micro/small cells 10

11 YoY revenue change 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 pullthrough Investing in data centres, hosting and cloud to leverage networking capabilities Potential to pursue additional vertical specialisms if opportunities identified Our IT services businesses Cisco specialist for networking and hosting infrastructure Specialist services for legal and accountancy firms Sales and distribution of IT equipment to volume segment Leading HP and Microsoft specialist Specialist services for the retail sector IT services revenue is growing 10% 5% 0% 11-5% 2011/ /13

12 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 Audio Web Video Streaming Solution design Integration and access Implementation Services Training and adoption In Life Management 12

13 YoY Net line losses (k) YoY decline 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 crosssell opportunities with voice BT line loss is improving Annual line losses for BT Business 2009/ / / /13 Call minutes continue to decline 0% -5% -10% -15% Decline in traditional voice minutes 2011/ /13 Market BT Business Source: Ofcom data and BT Business own data Call minutes are increasingly migrating to mobile, 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

14 Growth in broadband and networking services Our broadband base is still growing Leader in network 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 14 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 SME customers 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 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 15

16 And scale in Ireland and in global Conferencing Ireland 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 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 16

17 Anchor Trust case study Overview of Anchor Trust 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 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 17

18 Anchor Trust case study video 18

19 Key messages 19 Leading player in fixed telecoms in the UK SME and corporate midmarkets 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

20 BT Group plc Q&A 20