BT Outlines Strategy

Focus on profits, broadband, UK, Europe

April 8, 2002

4 Min Read

Ben Verwaayen's, BT's chief executive, today (Monday 8 April ) set out the Group's new three-year strategy. BT says it intends to be the best provider of communications services and solutions for everybody in the UK, for corporate customers in Europe and with global reach through partnerships. The strategic plan, which includes news of a new 'direct' broadband product, confirms BT as a single, integrated telecommunications company and has six main priorities:

  • A relentless focus on customer satisfaction

  • Financial discipline - profitable organic revenue growth, control of costs and cash

  • Broadband at the heart of BT, with a new 'direct' product to come from BT Retail which will allow customers direct broadband access to the internet

  • BT Ignite to concentrate on providing solutions and other value-added services to multi-site corporate customers with European operations

  • The placing of all UK networks under unified management

  • Brand extension into areas adjacent to BT's existing business where its brand has proven relevance, eg comms solutions and mobility for business customers Ben Verwaayen said BT is an integrated telecommunications company but with separate operating lines of business, and added: "There will be no IPOs, no burying our heads in internal re-structuring. "We will achieve profitable growth by striking the right balance between growth and managing our finances with great discipline. We will neither grow for growth's sake, nor cut costs as an end in itself. We will continue to manage our debt down, we will stay within our existing capital expenditure envelope. And we will return to the dividend list." He said BT would act as one company focused on customers: "If we can get our customer satisfaction right, introduce new and innovative services, manage costs and cash effectively and unite staff, we can deliver real value to our shareholders." Customer satisfaction is the cornerstone of the new strategy and BT says it aims to be the most customer-focused and efficient communications company in the markets in which it operates. There will be a radical programme for improvement across all parts of the company, making it easier to contact BT and talk to advisors. BT is working to make it as easy to interact with it on-line as it currently is by phone or face-to-face. Multi-functional contact centres will be created, along with new processes for wholesale customers. BT's target is to reduce customer dissatisfaction by 25 per cent a year. BT will become an 'e-centric' company to improve its processes and services, whilst constraining costs. Broadband will be at the heart of BT. And to help BT achieve its target of five million UK connections by 2006, BT Retail will shortly announce the launch of a 'direct' access-only broadband product, which will connect customers directly with the internet, without first going through an ISP. Key financial targets for the business are: * Six to eight percent profitable organic compound annual growth rate * Profit margin of 28-30 per cent * Positive free cash flow in 2002/3 * Return to the dividend list this year * Capital expenditure to be held below £3 billion Ben added: "BT was the first major telco to redress its balance sheet and restructure itself for the new dynamics of the market. And BT will be the first to return to the fundamentals of good business practice. "By focusing on delighting our customers, achieving good growth from sensible investments and by setting our objectives to stretching but achievable aims, BT can return to its rightful position as the benchmark of the industry."

    In a separate release:

    BT extends broadband to 100 more exchanges

    BT is bringing broadband services to 100 more exchanges in the UK following a reassessment of demand in all exchanges based on the new costs and wholesale prices that were announced by the company last month. The 100 extra exchanges mean that ADSL services will be available to more than two thirds of the UK population, a total of 16 million households, by the end of May. Under the programme, more than 50 further cities and towns will be added to the broadband map as well as gaps being filled in existing coverage.

    British Telecommunications PLC (BT) (NYSE: BTY)

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