BT Group plc
BT Business
Graham Sutherland, CEO
Agenda
Business description
Market context
Strategic investments
Core business
Channel reach
Case study – Anchor Trust
Key messages
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Our Journey
2001-2004
BT
Enterprises
BT Ireland
BT Business
• 2001 BT Business formed
• 2004 BT Mobile launched
(MVNO with Vodafone)
2005-2008
2009-2013
• 2005 TNS & Skynet
acquired (now iNet)
• 2009 Lynx & Basilica
integrated to form
Engage IT
• 2006 acquired Dabs.com
• 2010 Fibre launched
• 2007 acquired Lynx and
Basilica
• 2002 ESAT Group (bought
in 2000) renamed ESAT BT
• 2004 Expedite acquired
from NBS
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• MVNO deal with
EE
• 4G spectrum won
• 2012 Plusnet for
Business launched
• 2005 BT Ireland created
(formerly ESAT BT)
• 2009 RoI Consumer
business sold to Vodafone
• 2008 DETI investment in NI
started
• 2002 BT Openzone
launched
2013
• 2008 Fresca acquired
• 2013 Tikit acquired
• 2008 Wire One acquired
• 2013 BT WiFi rebrand
• NI Consumer
business
separated
• Exclusive
partnership with
Dolby
The new BT Business organisation
 The new organisation allows greater focus on small, medium and corporate midmarket business customers in the UK and Ireland
Portfolio
 Brings IT Services businesses together to realise synergies and drive growth
Core products
• Voice
• IP / UC
• Broadband &
Fibre
• Networking
Sales
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• Business
• Wholesale
Customers
BT Ireland
SMEs & Public Sector in
NI, Public Sector,
Corporates, & Wholesale
in RoI
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IT Services
• Mobile &
WiFi
UK Corporate
• UK Corporate (midmarket) Sales
• Custom Solutions
• UK Fleet
UK top-end SME
businesses and
corporate mid-market
• BT iNet
• BT Engage IT
• BT Business
Direct
• BT Tikit
UK SME
• SME Sales
• Enterprises Core
• Enterprises Ventures
Small to mid-market
SMEs, plus specific
target markets for
Enterprises
• BT Expedite &
Fresca
BT Conferencing
• BT Conferencing
UK, foreign domestic
and global businesses
The UK business market
UK Business market size
 Leading player in fixed services
Market size2
£12.9bn
38%
2%
2%
 Cross-selling opportunity in mobile and IT
services
Fixed voice
and data
Mobile voice
and data
IT services
(addressable
market)
 Large customer base and greatest UK reach
Competitive landscape
– 30% share of business broadband internet
access2
– 21% share of fixed network services2
– c. 1m SME customers
– A strong and trusted brand
– Sales channels across all segments, with
national coverage
 Very fragmented but competitive market
Market share %
£4.8bn
– 52% share of business calls and lines1
100%
80%
60%
40%
20%
0%
£3.9bn
BT market share
Calls & lines
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
Networking
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1.
Broadband
Switch
Revenue market share, from ‘Ofcom Telecommunications market data tables, Q1 2013’
shares and market sizing from IDC custom marketing sizing model (for businesses with <1000 employees) and BT Business revenue data
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plc
2. Revenue market
Ireland and Conferencing markets
BT Conferencing
BT Ireland
 Largest fixed communications provider for
SMEs in NI
 Provides audio, video and web conferencing in
170 countries in an £8.9bn market
 Leading networked IT services partner for
government and major customers in NI and RoI
 No. 4 player worldwide for audio1
 Second largest wholesale provider in RoI
 A leading player in Europe for video
Market revenue (£bn)
 Major competitors in RoI are Eircom, Vodafone,
Colt, AT&T and Verizon
Size of market currently addressed
3
The market opportunity for conferencing services2
North America
£4,341m
C. & E. Europe
& Russia
£401m
UK & Ireland
£605m,
W. Europe (ex.
UK / Ireland
£1,053m
£2.4bn
2
1
£0.6bn
Asia-Pacific
£1,626m
£0.6bn
0
RoI Business
(>100
employees)
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 No. 2 for audio in Europe1
RoI
Wholesale
RoI IT Services
Source: Market sizing data from IDC (customised for BT) for the
in which we are currently active
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plc
product markets
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
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
Decline of fixed voice, with migration to IP voice over next few years
Competitive
environment
Increasing competition from ‘over the top’ and IT service providers in core telecoms
Industry consolidation within and across sub-sectors and countries will continue
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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
TV & Sport
IT services
IT services
Mobility
4G
Delivering on our strategy
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High-growth
regions
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
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Q1 Q2
2011/12
Q3
Q4
Q1 Q2
2012/13
Q3
Q4
Q1 Q2
2013/14
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
Mobile subscribers (k)
We have grown our mobile base
280
260
240
220
200
180
Mar
2010
 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
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Mar
2011
Mar
2012
Mar
2013
4G focus on urban / indoor capacity
50m
100m
Picocells/Femtocells
500m
Micro/small cells
Strategic investments IT services
Our IT services businesses
 Comprehensive portfolio of IT services
 Also two specialist businesses addressing
retail and legal sectors
Cisco specialist for networking
and hosting infrastructure
 Greatest focus on higher margin, annuity
revenue
Sales and distribution of IT
equipment to volume segment
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
Specialist services for legal
and accountancy firms
Specialist services for the
retail sector
IT services revenue is growing
YoY revenue
change
−
Leading HP and Microsoft
specialist
10%
5%
0%
-5%
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2011/12
2012/13
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
Integration and
access
 Web
Implementation
Services
 Video
 Streaming
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Solution
design
Training and
adoption
In Life
Management
Strong position in legacy voice services
BT line loss is improving
Call minutes continue to decline
Decline in traditional voice minutes
2009/10
2010/11
2011/12
2011/12
2012/13
-100
-200
-300
-5%
Market
BT Business
-10%
-400
-500
2012/13
0%
0
YoY decline
YoY Net line losses (k)
Annual line losses for BT Business
-15%
Source: Ofcom data and
BT Business’ own data
 Competitively priced voice and broadband
bundles
 Call minutes are increasingly migrating to
mobile, email and VoIP
 Targeted pricing initiatives that balance
acquisition and margins
 BT Business minutes are declining slower
than the market
 Strategic investments will drive further cross-  We are developing new IP voice and FMC
sell opportunities with voice
solutions, which can be bundled with other
services
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Growth in broadband and networking services
Our broadband base is still growing
 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
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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
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
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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
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
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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
Anchor Trust case study
Overview of Anchor Trust
What BT is delivering
 England’s largest not-for-profit provider
of housing and care for the over-55s,
with £264m turnover
 Professional services to redesign IT
Infrastructure
 Offers purpose-built retirement
properties and specialist care for over
35,000 people at over 1,000 UK
locations
 PC management and support
 Premises are a mix of offices, care
homes and support of home workers
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 Single point of contact service desk
 Site infrastructure support
 Dual data centre hosting services under
the new IaaS model
 Replication and Workplace Recovery
Services
Anchor Trust case study video
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Key messages
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
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BT Group plc
Q&A
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