BTwatch Report #221 April-May 2011 Snapshot
22 June 2011
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Table of Contents
1 Executive brief
4 BT Group
4 FY10-11 results
4 BT continues financial recovery, but revenue falls
4 BT upbeat on underlying revenue, but clearly more to do
5 Annual Report
5 BT Group Financial highlights, Q4 and 12m FY10-11
5 Annual revenue decline across all divisions
5 BT Group, divisional revenue performance by unit, Q4 and 12m FY10-11
6 Financial reports
6 Return to growth predicted, but where from?
6 Openreach propping up new-wave growth
6 BT Group, revenue by product type, Q4 and 12m FY10-11
7 Community
7 Retail suffers as GS and Wholesale continue rehab
7 BT Global Services, revenue by type FY08-09 to FY10-11 and compound annual growth rate (CAGR)
7 BT Retail, revenue by type FY08-09 to FY10-11 and CAGR
7 BT Wholesale, revenue by type FY08-09 to FY10-11 and CAGR
7 Openreach, revenue by type FY08-09 to FY10-11 and CAGR
8 Regulation
8 Revenue trends for BT divisions
8 BT Global Services, revenue by type FY08-09 to FY10-11
9 BT Retail, revenue by type FY08-09 to FY10-11
9 BT Wholesale, revenue by type FY08-09 to FY10-11
9 Openreach, revenue by type FY08-09 to FY10-11
10 Continuing cost reductions provide some comfort
11 BT Group, operating costs, Q4 and 12m FY10-11
11 Profitability up, but a short-term consolation?
12 BT Group, adjusted EBITDA performance by unit, Q4 and 12m FY10-11
12 BT Group, operating cash flow performance by unit, Q4 and 12m FY10-11
13 Capital expenditure to continue on stable path
13 BT Group, capital expenditure, Q4 and 12m FY10-11
14 Are purely cost-driven profit gains a worry?
15 Pension woes ease as BT shows merit of holding nerve
16 Pensions Regulator also backs off
16 Markets yet to shed scepticism
18 BT KPIs — total lines faintly positive, but BT share declines
18 BT Group, key performance indicators, Q4 and 12m FY10-11
18 BT Group, broadband key performance indicators, Q4 and 12m FY10-11
19 Cloud services
19 BT to test “liquid bandwidth” through Catalyst project
19 TM Forum Catalyst expands
20 Fujitsu interview
20 Andy Stevenson, Chief Executive, Fujitsu Telecommunications Europe
20 Fibre
20 Interview: Fujitsu confirms rural fibre business case
20 BT’s network an asset… and possible legacy liability
20 Fujitsu predicts dramatic rollout cost reductions — if BT prices revised
21 Fibre
21 More fibre competition in high-density areas
21 Fujitsu confident its numbers stack up; BT appears isolated in scepticism
22 Partnering Openreach on fibre appears unlikely
22 International models influence “truly open access plans”
23 Fujitsu riding “perfect storm” as BT surprised
23 FTTC described as already dated, with inadequate future-proofing
24 Still obstacles before investment a done deal
25 Scope to expand plans beyond the “Final Third”
25 Ambitious plan intended to provide strategic appeal for retailers
25 Fujitsu emphasises partner engagement, but altnets less effusive
26 Fujitsu to stand on the shoulders of earlier network builders
26 Fujitsu confident on continued BT relationship, despite “awkwardness”
26 Will BT raise the stakes in its fight-back?
27 Legal
27 BT/Phorm case thrown out
27 Legal
27 BT loses judicial review of DEA
28 Legal
28 BT/Phorm case thrown out cont’d…
28 People
28 People movement highlights
29 Research and development
29 BT R&D ties with Fraunhofer Fokus for OpenEPC
29 Research and development
29 BT ties with ZTE for R&D
29 BT continuing focus on network convergence
31 BT Retail
31 Advertising
31 FY10-11 BT Retail
31 Broadband growth disguises Retail woes…
31 …Signs BT success built on rival’s slip-ups
32 Products and services
32 BT launches MyDonate
32 BT Retail, financial highlights, Q4 and 12m FY10-11
32 BT Retail, revenue by customer group, Q4 and 12m FY10-11
32 Wi-Fi continues to add value, Vision less so…
33 Pricing and tariffs
33 BT seeks maximum PR from its fixed-to-mobile rate cut
33 BT Infinity — smouldering but not yet catching fire
33 BT not alone in underachieving on fibre
34 Pricing and tariffs
34 Customer relationships
34 BT outperforms copper rivals in Ofcom complaints review
35 Television services
35 Suppliers
35 BT selects customer care solution from Alcatel-Lucent
35 Television services
35 Marks: what went wrong with BT Vision
36 BT Conferencing
36 BT Conferencing launches cross-platform mobile app
36 OnLive
36 OnLive to launch in the UK
37 BT Conferencing
37 BT Conferencing launches cross-platform mobile app cont’d…
37 BT Engage IT
37 BT Engage IT prepares for customer push
38 BT Expedite
38 Lowe: future retail trends
38 Technology investment falling
38 Self-service revolution
39 Integration is key for multichannel retailers
39 Rise of mobile PoS
40 BT Ireland
40 BT Ireland
40 BT Ireland signs fibre backbone deal with 3 Ireland
41 BT Global Services
41 Awards and accreditations
41 FY10-11 BT Global Services
41 Contract wins flagged as £8bn order book pursued
42 Awards and accreditations
42 GS focus on regional and international government work
42 Cash flow at GS expected to continue improving
42 BT Global Services, financial highlights, Q4 and 12m FY10-11
43 Contracts
43 BT completes first stage of Carglass contract
43 Public sector contracts
43 BT signs supplier contract for government network
45 Financial services
45 BT Radianz achieves 15,000 member sites
45 BT wins part of Scottish government framework deal
45 BT trumpets ten-year Lancashire Council deal
46 Tech Mahindra/Mahindra Satyam
46 Gurnani: TechM-Mahindra Satyam merger slated for June
46 NAO slams NPfIT; calls for “damage limitation”
47 History and reductions in scope
47 Summary of reductions in scope of NPfIT contracts in London and the South
48 BT’s progress to date suggests lessons learned
48 Progress on delivery NPfIT contracts in London and the South (BT contracts)
49 Progress on delivery NPfIT contracts in East, Midlands, and North (CSC contracts), and overall completion rates
49 Work unlikely to be completed in time
50 Alternative system incurring extra costs
50 BT defended in government response
51 Implications for BT not yet clear
52 Government to open contracts up to smaller firms
52 BT International: Americas
52 BT to expand Brazilian data centre
53 BT trumpets North American UCaaS capabilities
53 BT International: Asia
53 BT launches Onevoice and Microsoft Lync in Asia-Pacific
54 BT International: MEA
54 BT to double connections in African and Middle East
55 Products and services
55 BT promotes cloud services to pharma industry
56 Suppliers
56 BT selects B2M Solutions for mobile management
57 BT Wholesale
57 FY10-11 BT Wholesale
57 BT Wholesale still slowly turning around
57 BT Wholesale, financial highlights, Q4 and 12m FY10-11
59 Wholesale catching up on Ethernet
59 Contracts
59 BT to work with Everything Everywhere on 4G trials
60 Hints at BT taking a more creative approach to next-generation rollout
60 BT Media & Broadcast
60 Aframe partners with BT for launch of Media IP Nexus
61 Products and services
61 BT Wholesale admits ongoing SFI2 billing errors
62 BT Agilemedia
62 BT Agilemedia adds TV voting platform to Facebook
63 Openreach
63 Fibre
63 Openreach names exchanges for next fibre rollout phase
63 FY10-11 Openreach
63 Openreach external growth shows need for efficiencies
63 Fibre spending on track, although landscape is changing
64 Openreach, financial highlights, Q4 and 12m FY10-11
64 Cost reductions not reaching expectations at Openreach
65 Network
65 BT disputes Fibrestream’s ‘inferior’ cable claim
65 Garfield needs to lead reforms
65 Network
65 BSkyB and Call Flow to trial Openreach PIA products…
66 …but rivals gang up to question pricing
66 Fujitsu’s comparison between Openreach prices and claimed efficient market prices for physical infrastructure access
66 Livingston also alerted to concerns…
67 …and BT boss is belligerent in response
67 Further calls for full separation of network assets
67 Ofcom looks set to intervene
68 BT aims to boost FTTC to 80Mbps
69 Openreach to recruit ex-MoD personnel for fibre rollout
69 Fibre rollout or crisis management?
70 Index
Index
A
Accenture, 47
Aframe, 60
Alcatel-Lucent, 35
- Motive, 35
Amartus, 19
Amor Business Technology Solutions, 45
Anglo American Plc, 54
Apple, 36
- iPad, 36
- iPhone, 36
Atos Origin, 45
B
B2M Solutions, 56
Babcock & Brown
- Eircom
- Meteor, 40
BASF, 41
Be Broadband, 21
Belron International, 43
- Carglass, 43
Blackstone, 8
British Broadcasting Corporation (BBC), 32, 35
- iPlayer, 32, 35
Broadband Delivery UK (BDUK), 21, 52, 66
BSkyB, 25, 34, 35, 36, 65, 66
BT Group, 4, 5, 6, 7, 8, 10, 11, 12, 13, 15, 18, 19, 20, 21, 22, 26, 27, 28, 29, 31, 36, 41, 43, 45, 54, 57, 60, 63, 66, 67, 68
- Asia
- Tech Mahindra, 46
- BT Global Services, 4, 5, 6, 7, 8, 10, 11, 12, 13, 16, 28, 37, 41, 42, 43, 45, 46, 50, 52, 53, 54, 55, 56
- BT Benelux, 43
- BT Brazil, 52
- BT Germany, 42
- BT International, 52, 53, 54
- BT Onevoice, 53
- BT Radianz, 45
- BT Supply Chain Solutions, 56
- MeetMe, 36
- Mobile Workforce Management, 42
- One Connect Limited, 45
- One Source for Cisco TelePresence, 40
- Onevoice, 53
- RiO, 47, 48, 49
- Virtual Data Centre, 52
- Work Anywhere, 42
- BT Innovate & Design, 19
- 21CN, 26
- BT Pension Scheme
- Crown Guarantee, 16
- BT Retail, 5, 6, 7, 8, 9, 11, 12, 13, 15, 18, 26, 27, 31, 32, 33, 34, 35, 36, 37, 38, 39, 63
- Adam and Jane, 31
- BT Broadband, 34
- BT Business, 8, 37, 45
- BT Conferencing, 36, 37
- BT Engage IT, 37
- BT Expedite, 38, 39
- BT Fresca, 39
- BT Infinity, 33, 34
- BT Ireland, 31, 40
- BT Lynx, 37
- BT Vision, 32, 35, 36
- MyDonate, 32
- OnLive, 36
- Plusnet, 31
- Race to Infinity, 63
- BT Wholesale, 5, 6, 7, 8, 9, 10, 12, 13, 18, 29, 43, 57, 59, 60, 61, 62
- BT Agilemedia, 62
- BT Media & Broadcast, 60
- IP Exchange, 57
- Wholesale Broadband Connect, 57
- Executives
- Balaam, Martin, 37
- Blakesley, Neil, 41
- Burger, Bas, 55
- Campenon, Olivier, 54
- Chanmugam, Tony, 4, 10, 13, 14, 45, 64
- Cleaver, Paul, 56
- Crockett, Fergus, 65
- Davis, Sally, 59
- Gallindo, Sérgio Paulo, 52
- Garfield, Olivia, 24, 65, 69
- Hallsworth, Jeremy, 62
- Kelly, Jeff, 42
- Laughlin, Cam, 36
- Lereuth, Karsten, 42
- Livingston, Ian, 22, 57, 66, 67, 69
- Lock, Neil, 55
- Lowe, Rich, 38, 39
- Murphy, Bill, 45
- Patterson, Gavin, 33, 36
- Petter, John, 33
- Raja, Himanshu, 28
- Rogers, Neil, 43
- Rosenman, Yury, 55
- Selley, Clive, 29
- Shainberg, Gary, 28
- Sutherland, Graham, 40
- Taylor, Kevin, 53
- Widmer, Kaspar, 28
- Willis, Peter, 19
- Ex-executives
- Handcock, Tony, 28
- Marks, Dan, 35
- Raja, Himanshu, 28
- Shainberg, Gary, 28
- Wright, Richard, 28
- Innovate & Design
- Adastral Park, 29
- Openreach, 5, 6, 7, 8, 9, 12, 13, 14, 20, 21, 22, 33, 34, 63, 64, 65, 66, 67, 68, 69
C
Cabinet Office (UK), 43, 51, 52
- Public Sector Network, 43
Call Flow, 65
Capita, 45
Carillion, 41
Cerner, 47
Cisco Systems, Inc., 19, 36, 37, 40, 53
COLT Telecom, 21
Communications Management Association, 67
Competition Appeal Tribunal, 8
Comptel, 19
Computer Sciences Corp, 46, 47, 49, 50, 51
Credit Suisse, 28
D
Dell, 45
Department for Business, Innovation and Skills
- Vaizey, Ed, 66
Department of Health, 46
Digital Britain
- Race Onlines 2012, 7
Digital Economy Act (UK), 27
DTV Services
- Freeview, 35
E
Ecopetrol, 41
European Union, 60
- European Commission, 28
- European Court of Justice, 27
Everything Everywhere (Orange UK, T-Mobile UK), 8, 29, 59, 60
F
Facebook, 31, 36, 39, 62
Fibrestream, 65
France Télécom
- Orange, 57
Fraunhofer Institute for Open Communication Systems (Fraunhofer Fokus), 29
Fujitsu, 20, 21, 22, 23, 24, 25, 26, 45, 47, 48, 51, 52, 60, 63, 66, 68
- Fujitsu Telecommunications Europe, 20, 26
- Stevenson, Andy, 20, 26
G
Gartner Group, 42, 53
General Electric Co. (GE)
- NBC Universal
- National Broadcasting Company (NBC)
- CNBC, 46
Google, 36
Grupo Konecta, 41
H
Hewlett-Packard, 37, 54
High Court, 27
Home Office (UK), 27, 28
House of Commons
- Public Accounts Committee, 46, 50, 51
Huawei Technologies, 59
Hutchison Whampoa, 31, 40
- 3 Group
- 3 Ireland, 31, 40
- Geo, 21, 66
Hyperoptic, 21
I
IAS 19, 15
Information Commissioner’s Office (UK), 27
InfoVista, 19
Intune Networks, 19
Investec, 14, 16
ITV, 60
J
Jabber, 53
K
Kainos Software, 45
L
Lancashire County Council, 45
LifeSize Communications, 36
Logica, 28, 45
Lyle & Scott, 39
M
Mahindra Satyam, 46
Maindec Computer Solutions, 45
Marketing Society, 41
MetraTech, 19
Microsoft, 7, 36, 37, 53
- Lync, 53
Ministry of Defence, 69
Morgan Stanley, 16
Motive, 35
N
National Audit Office, 46, 47, 48, 49, 51
National Broadband Network (Australia), 22
National Health Service (NHS, UK), 45, 46, 47, 48, 49, 50, 51
- National Programme for IT, 46, 47, 48, 49, 50, 51
- NHS Connecting for Health, 50
Nestlé, 28
Nokia, 59
Nokia Siemens Networks, 59
O
Ofcom, 8, 21, 22, 24, 25, 27, 34, 35, 67
- LLU, 18, 31, 57, 63
- Richards, Ed, 27, 67
- Wholesale Line Rental, 63, 64
Olympic Games, 7
- London 2012, 7
OnLive, Inc.., 36
Openet, 19
Ovum, 37
P
Pensions Regulator (UK), 16
Phorm, Inc. (121Media), 27, 28
Polycom, 36
Privacy International, 27
Progress Software, 19
Prosource.it, 45
PSA Corporation, 41
Public Sector Network, 43
R
Regulation of Investigatory Powers Act, 28
Right Management, 69
Royal Mail, 41
S
Sasol, 54
Siemens, 59
Student Loans Company, 45
SurfControl, 37
Symantec, 37
Syngenta, 28
T
TalkTalk Telecom Group plc, 21, 24, 25, 27, 31, 33, 34, 59, 65, 66
Tandberg ASA, 36
Tech Mahindra, 46
- Mahindra Satyam, 46
Technology
- ADSL, 33, 61
- ADSL2+, 57, 61
- Broadband, 4, 6, 7, 8, 10, 16, 18, 20, 21, 22, 26, 29, 31, 32, 33, 34, 35, 36, 40, 46, 48, 52, 57, 59, 60, 61, 63, 65, 66, 67, 68, 69
- DSL, 18, 31, 34
- Ethernet, 21, 40, 59, 60, 63
- Fibre, 4, 14, 16, 19, 20, 21, 22, 23, 24, 25, 26, 31, 33, 34, 36, 40, 52, 59, 60, 63, 64, 65, 68, 69
- Fibre-to-the-cabinet (FTTC), 20, 23, 68
- Fibre-to-the-curb (FTTC), 20
- Fibre-to-the-premises (FTTP), 21
- FTTH, 21
- HD, 32, 35
- ICT, 20, 29, 41, 45
- IP, 29, 35, 41, 43, 52, 53, 57, 60
- IPTV, 29, 35
- LLU, 18, 34, 65
- LTE, 29, 40, 59, 60
- Next-generation access (NGA), 22
- R&D, 29, 55
- SMS, 31
- Unified communications as a service (UCaaS), 53
- Unified communications (UC), 53
- VoIP, 35, 41
- Wi-Fi, 32
Telefónica, 21, 40
- Telefónica Europe (O2), 21, 40
Tellabs, Inc., 59
Tiscali SpA, 31
TM Forum, 19
U
UK Government, 28, 45
- Joint Intelligence Committee, 29
Unilever, 54
V
Virgin Media, 21, 24, 25, 32, 33, 34, 66, 67, 68
- Virgin Mobile, 33
Vodafone, 25
Vtesse Networks, 66
W
WHSmith, 38
World Economic Forum, 54
Y
YouView (Project Canvas), 35, 36
Z
ZTE, 29
About BTwatch
Report: 221
Covering: April-May 2011
Published: June 2011
Next report: July 2011
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