Annual Analyst
Briefing
BT Wholesale
15 December 2011
Legal disclaimer: Information is accurate at the time of issue
but is subject to change. Applicable BT standard terms and
conditions apply. Plans are indicative only and will, where
applicable, be subject to the successful outcome of any trial
and to any legal and regulatory approvals being given
1
Current thinking: subject to change 15 December 2011
Nigel Stagg
CEO
2
Current thinking: subject to change 15 December 2011
Wholesale in BT – multi-layered & substantial
BT
Group
Revenue
£20bn
wholesale in the UK
BT
Retail
BT
Ireland
BT
Global
Services
BT
Wholesale
Openreach
Global
Telecom
Markets
Revenue
£4.2bn
Revenue
£4.9bn
Operations
in over 170
countries
BT
Innovate & Design
Revenues as at financial year 2011
3
Current thinking: subject to change 15 December 2011
BT
Operate
UK market more competitive than most
• Openreach is responsible for the
last mile of BT‟s UK access network
and wholesale capacity “vanilla”
products
• Openreach provides equivalent
and open access to all c.500
of its customers (pricing, T&Cs)
BT Global
Services
BT Retail
Homes and businesses
4
Current thinking: subject to change 15 December 2011
Tough global wholesale markets – especially in Europe
European wholesale market revenue changes, 2009/10
National
International
7.30%
10%
Total (National and International)
3.10%
2.80%
5%
0%
-2.80%
-5%
-4.80%
-0.70%
-12%
-8.40%
-2.10%
-10%
-15%
Voice
Non- Voice
Total (Voice and Non-voice)
•
Voice revenues in decline
•
Non-voice revenues growing but not fast enough
•
Consolidation of voice and non-voice international traffic around a small number
of highly interconnected carriers with scale
Source: Ovum European Wholesale Market Share 2009-10: The Detail (published September 2011)
5
Current thinking: subject to change 15 December 2011
BT Wholesale has good growth in non-traditional areas
BT Wholesale external revenue
excluding transit
BT Wholesale revenue by sector
excluding transit
3,000
2,500
c.15%
2,000
1,500
c. 55%
c. 30%
1,000
+14%
+48%
500
-
2009
2010
MNS & IP platform services
2011
Other
Reseller
Traditional wholesale
6
Current thinking: subject to change 15 December 2011
Managed contracts
While continuing to manage operating costs
Cumulative change in opex
Year on year opex reductions
100
0.0
-1.0
Rebased 2008 = 100
95
-2.0
90
-3.0
%
-4.0
85
-5.0
80
-6.0
-7.0
75
2008
7
2009
2010
2011
Current thinking: subject to change 15 December 2011
2009
2010
2011
And improving customer service
Mobile Ethernet „Right First Time‟ provision & repair
105%
100%
95%
Provision
Repair
90%
85%
80%
75%
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
•
Ability to provide hundreds of mobile Ethernet circuits a month almost 100% Right First
Time
•
The „predict to prevent‟ process allows us to proactively detect and fix performance
and availability issues faster and more effectively
88
Current thinking: subject to change 15 December 2011
Our focus is to remain the wholesaler of choice
Boost resell
•
Increase multi-customer segment reselling
Mobile sector
•
Increase relevance to the mobile operators
IDD
•
Seize new growth opportunities in IDD
IP & Ethernet services
•
•
Transfer from legacy to IP
Continue strong growth in Ethernet
•
Bundled services including IT (leverage BT‟s
IT services capabilities)
•
Maintain position as leading wholesale
managed services provider in UK and expand
globally
Bundled services including IT
Managed services
9
Current thinking: subject to change 15 December 2011
Chet Patel
MD Markets
10
Current thinking: subject to change 15 December 2011
What we traditionally sell to our customers
Mobile
Network
Operators
Fixed
Consumer
Providers
Fixed
Enterprise
Providers
Indirect
Channel
1,200
customers
Voice
Data
Broadband
11
Current thinking: subject to change 15 December 2011
Brand
Extenders
Broadcasters
& Content
Owners
Opportunity to boost resell to multi-customer segments
Fixed
Consumer
Providers
Fixed
Enterprise
Providers
Indirect
Channel
Brand
Extenders
1,200
customers
12
1
Restructured reseller programme
2
Sell multiple products
3
Sell bundled services including IT
Current thinking: subject to change 15 December 2011
Track record of investing for mobile customers
• Provider of managed Ethernet and TDM backhaul for all MNOs in the UK
• 11,000+ mobile Ethernet connections delivered as at 30 September 2011
• Developed an industrial scale process which delivers reliably
• Fixed partner of choice for both own use and sell through
– lines, broadband and data
• Provider of WiFi to all active
mobile operators
• Field service - maintenance for radio
equipment and backhaul
13
Current thinking: subject to change 15 December 2011
Building more relevance to mobile customers
• Data growth driving further infrastructure opportunities today
• LTE will drive further infrastructure and service opportunities
• We are already investing and experimenting with overlay technology/offload
technology
• Service assurance can and will be one of our key differentiators
– measure service differently and be more pro-active
• Mobile operators will seek ARPU growth in fixed
- we can deliver more tailored solutions to help them achieve this
• New opportunities like CRM
14
Current thinking: subject to change 15 December 2011
Seizing new IDD growth opportunities
We already have:
• A good IDD cost base
• Tata voice partnership in conjunction with retained strategic relationships
gives us a unique opportunity to optimise across market
Our focus:
• Continued growth through reseller channel partners
• Continued margin focus
• Transparency, flexibility and stability of costs
allows us to create compelling customer propositions
• Extended benefits through BT‟s investment in IP
•
•
•
15
Seamless service provision through TDM and IP
Multi-currency pre-pay capability
Full „futures‟ roadmap including global federation
model, GSMA co-ordination and continued
applications development
Current thinking: subject to change 15 December 2011
Steve Best
MD Products
16
Current thinking: subject to change 15 December 2011
BT Wholesale IP Exchange has multi-media capability
PSTN
Established
Telcos
IP Exchange
Mobile
Operators
VoIP
Service
Providers
•
Rapid growth in the UK, interconnecting
over 130 VoIP service providers
•
Simplifies complex interoperability
challenges
•
Full service capability for new entrants
into the market
•
Multi-media capability – voice, SMS,
roaming, video
17
Current thinking: subject to change 15 December 2011
With a roadmap for richer services
Content
Users
•
•
•
•
•
•
•
•
•
•
Information
Media
Shopping
Others
Mobile Device
Landline Phone
PC
TV
Game Station
Others
•
•
•
•
•
IM
Portals
File Sharing
Payment
Others
Connect users, handle
content, support communities
& enhance services
Pull & push
Communities
Voice, data & media
Traditional wholesale…
• Global
growing
fast
Surplus
sales toIPX
reduce
unit cost
Sales via price
• of
Singapore
next to rollout
Sales
commodity node
services
Release
cycles
technology
• HD
Voice
trials indriven
Q4 for MNOs
•
Roll out of BICC interworking in Q4
•
Automated numbering portal
18
Applications
Current thinking: subject to change 15 December 2011
Sharing
• Social
Community
• Community
of Interest
• Others
Users
•
•
•
•
•
•
Mobile Device
Landline Phone
PC
TV
Game Station
Others
IP Voice Services designed for end user voice capabilities
Geographically
redundant
BT Wholesale
IP Exchange
Platform
Data Centre B
Data Centre A
Media
Server
Media
Server
Application Network
Server
Server
Application Network
Server
Server
BT Wholesale
IP Network
Service
replication
in real time
Legacy PBX
PBX Handset PBX Handset
19
Connected via multiple
diverse connections
IP PBX SIP Trunk
IP Phone
Current thinking: subject to change 15 December 2011
IP Phone
Fully Hosted
IP Phone
IP Phone
Continuing to add value through applications
Unifying end users voice services
and CRM systems to boost
productivity, reduce call handling
time and improve customer
interaction
20
Current thinking: subject to change 15 December 2011
Laptop and Smartphone IP
Voice integration
Ethernet remains a big opportunity in the UK
• Ethernet over MPLS
• Component based offering greatest
customer flexibility in configuration
• Fibre, Copper (EFM), in-building handover
and radio access options
• 200K to 10Gbps bandwidth options
• Resilience options
• On-line pricing, ordering & repair
• Rapid node roll out across UK – getting
closer to end customers:
• 1,079 live fibre nodes
• 721 live EFM nodes
• Additional 70 fibre nodes in build
• FTTC/P roll out
• Additional nodes planned
21
Current thinking: subject to change 15 December 2011
Our current portfolio is based on flexibility
and choice
Market leading
Greatest choice of
market
Configuration options
22
Bandwidth options
• 1Mbps-10Gbps access
• 200k-1Gbps vLAN
• 30 minutes to increase bandwidth
Access options
• Fibre
• Copper Ethernet in first mile
• In-building handover
• Radio
Configuration options
• E-Line & E-LAN
• Point to point
• Hub & spoke
• Partial & full mesh
More efficient traffic
routing
Class of service
• Uncontended & contended (5:1)
• QoS model on E-LAN
Better commercials
Pricing
• Up to 25% fibre price reductions
• 5yr term option on 1Gbps
• Free connection on 3yr term contracts
Current thinking: subject to change 15 December 2011
Investment continues
23
Greater access
choice
•
•
Ethernet over FTTC/P access
Extend customer access choice
Ethernet in first mile
differentiation
•
•
•
Up to 35Mbps proactive monitoring
Improved services assurance
More bandwidth for less
Further Quality of
Service options
•
•
•
Six QoS options on E-LINE & E-LAN
Service differentiation
Traffic prioritisation
Managed Install
•
•
•
Connectivity & router installed on a single visit
Service value add
Reduced TCO
Current thinking: subject to change 15 December 2011
Nigel Stagg
CEO
24
Current thinking: subject to change 15 December 2011
Our focus is to remain the wholesaler of choice
Boost resell
•
Increase multi-customer segment reselling
Mobile sector
•
Increase relevance to the mobile operators
IDD
•
Seize new growth opportunities in IDD
IP & Ethernet services
•
•
Transfer from legacy to IP
Continue strong growth in Ethernet
•
Bundled services including IT (leverage BT‟s
IT services capabilities)
•
Maintain position as leading wholesale
managed services provider in UK and expand
globally
Bundled services including IT
Managed services
25
Current thinking: subject to change 15 December 2011
Q&A
26
Current thinking: subject to change 15 December 2011