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BT Retail SME Broadband Strategy Briefing. 29 April, 2004. Pierre Danon CEO, BT Retail. Agenda. Insight into the SME broadband revolution Highlight the BT Retail Business Broadband success The opportunity to further transform SME businesses with broadband access and applications

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Presentation Transcript
agenda
Agenda
  • Insight into the SME broadband revolution
  • Highlight the BT Retail Business Broadband success
  • The opportunity to further transform SME businesses with broadband access and applications
  • Announce and demonstrate the next steps
  • Question & Answer session
slide4
Certain statements in this presentation are forward-looking and are made in reliance on the safe harbour provisions of the US Private Securities Litigation Reform Act of 1995. These statements include, without limitation, those concerning: broadband growth and access in the UK, demand for broadband applications; and revenue growth and greater profitability in broadband.

Although BT believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.

Factors that could cause differences between actual results and those implied by the forward-looking statements include, but are not limited to: material adverse changes in economic conditions in the markets served by BT and its lines of business; future regulatory actions and conditions in BT’s operating areas, including competition from others in the UK and other international communications markets; selection by BT and its lines of business of the appropriate trading and marketing models for its products and services; fluctuations in foreign currency exchange rates and interest rates; technological innovations, including the cost of developing new products and the need to increase expenditures for improving the quality of service; prolonged adverse weather conditions resulting in a material increase in overtime, staff or other costs; developments in the convergence of technologies; the anticipated benefits and advantages of new technologies, products and services, including broadband and other new wave initiatives, not being realised; the timing of entry and profitability of BT and its lines of business in certain communication markets; significant changes in market shares for BT and its principal products and services; to the extent that BT chooses to sell assets or minority interests in its subsidiaries, prevailing market levels for such sales; and general financial market conditions affecting BT’s performance. BT undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

creating the online economy the value of broadband
Creating the online economy…the value ofbroadband

Employee productivity growth

Enabling remote working and enhanced communication services ie video conferencing and increased speed of file transfers

Faster access to customers and suppliers

Link directly with customers and suppliers for fast ordering and supply management

Lowers the cost of doing business

Enables new solutions to help drive operational efficiencies and control costs

New opportunities now easily accessible

Offers access to new applications and services not traditionally available to small businesses

Creating new ways to do business

Realise the potential of a quality website to market and sell products and services

the uk broadband revolution
The UK broadbandrevolution
  • 85%of UK SMEs are in a broadband enabled area heading towards 100% by end 2005 (source: BT Wholesale)
  • 32% of UK SMEs using the internet in broadband enabled areas have DSL connections
  • Growth in UK at a rate of 3,500 new connections each week
  • Increasing number of SMEs buying online applications
  • Market for small business hosted applications expected to treble by 2008/09 to c £1bn*
  • UK has moved up from third to second place in worldwide survey of e-readiness*

*Economist Intelligence Unit - 2004 e-readiness rankings

*BT Analysis 2003, MARS & Co, Continental, Oftel, Edengene, BT Analysis

driving towards broadband profitability
Driving towards broadband profitability
  • Driving Netcentricity
  • Business online orders increased from 7% to 21%(Mar ‘03 to Mar ‘04)
  • Business online help usage increased from 29% to 56%(Mar ’03 to Mar ‘04)
  • Driving Customer Satisfaction
  • Very satisfied increased from 45% to 51%
  • Dissatisfaction reduced from 17% to 7%
  • (Apr ’03 to Mar ’04)
  • Driving Efficiency
  • >50% reduction in helpdesk costs per user
  • >17% reduction in network costs(Apr ’03 to Mar ’04)
  • Driving the market
  • BT has >50% share of the UK SME DSL market connections
  • >250k BT business DSL connections, 1.2m business people using BT

Driving ARPU

  • ARPU growth through marketing ICT solutionsto broadband connected customers

Trajectory to business broadband profitability in 2005

Narrowband is already profitable

but we know there is an appetite for more than access
But we know there is anappetitefor more than access
  • 48%of our access customers buy applications from BT
  • 100% growth in broadband applications in 2003/04
so what are the small and medium business needs
So what are the small and medium business needs?

Simple

Simple and complete solution‘The hardest part is sorting through the chaff and trying to find exactly what you’re looking for.’GFK Feb 2003

Channels

Channels that suit their specific needs‘Flexibility and Choice’BT Research March 2004

Single Point of Contact

Single supplier for telecommunications,IT requirements and supportBT Research March 2004

Local

Local support and purchasing points‘Local presence generally welcomed’ DBBT March 2004

Value for money

Pay for what they get, direct business benefits

‘Businesses are seeking to use ICT shrewdly to unlock business value’ DTI 2003

Relevant

Addressing specific needs ‘Most entrepreneurs find themselves spending more time managing the business they have than generating new business’Microsoft bCentral 2003

Time Saving

Giving them time to focus on core competenciesBT Research March 2004

but there are barriers
But there are barriers….

Capital investment

‘Cost of acquisition is seen as an overwhelming barrier to ICT investment’

DTI 2003

Fear of complexity

‘The most complex things can be no problem if the supplier does their job in the right way’

DBBT March 2004

Lack of understanding

‘Smaller businesses more than any need someone to help them exploit technology but no one is set up to do it’

DTI 2003

Lack of technical resource

‘Only half of smaller businesses (1-50 employees) have an IT department or team’

Computer Weekly Oct 2003

our vision for smaller business
Our vision for smaller business

Broadband access

Make it easier to buy

Support and services

Resellers andIP Helpdesks

Telco’s / ISP’s

Make it easierto install and use

Retail distributors

Applications vendors

Office connectivity

Value added services

Make it easier to maintain

a seamless on line experience
A seamless on-line experience

Product / Service Offerings

BT will provide a single point for all customer needs…..

Support and

Services

“I now have a single website for all my needs….”

Office

Connectivity

Value Added

Services

Broadband

Access

Support

services

Office

connectivity

Customer experience

Value

added

services

Netcentricity

Customer satisfaction

Simple and complete user experience

Access

69% of BT Business customers will value a single online sourceof applications and further see BT as a natural supplier

we have already started to address the needs

plus…

We have already started to address the needs…

Stage 2 - Applications and Software

Connected& Trading

  • Connected& Secure
  • - Security Pack
  • Datasure
  • - Trader Pack
    • Shop builder
    • On-line Payments
  • Contact Central on Demand
  • - Business Admin Pack

Support and services

Support

Stage 1 -

Access, Adviceand Support

Office Connectivity

Office connectivity

Connected & Professional

BTBroadbandOffice

Internet Business Pack

Valued added services

BT Business Broadband

Broadband access

www.btbroadbandoffice.com

but we also have a greater ambition
Great progress inBut we also have a greater ambition…

Simple andcomplete solutions

  • Single supplier
  • Value for money
  • Time-saving
  • Relevant propositions
  • Local support
  • Access
  • Product and applications
  • Support and service
  • Office connectivity
driving towards our vision
Driving towards our vision

Stage 3 - Single supplier, local support, value

for money, relevance, time saving propositions

  • Connected& Complete
  • - Hosted Exchange
  • Subscription Office
  • Business Admin Pack
  • Internet Security Pack

Stage 2 - Applications and Software

Connected& Trading

  • Connected& Secure
  • - Security Pack
  • Datasure
  • - Contact Central on Demand
  • Trader Pack
  • - Promoter Pack
  • - Trader Pack
    • Shop builder
    • On-line Payments
  • Contact Central on Demand
  • - Business Admin Pack

Support and services

Support

Stage 1 -

Access, Adviceand Support

Office Connectivity

Office connectivity

Connected & Professional

BTBroadbandOffice

Internet Business Pack

Valued added services

BT Business Broadband

Broadband access

www.btbroadbandoffice.com

an innovative first for small business
An innovative first for small business

Hosted ExchangeAll the benefits of Microsoft Exchange Server 2003 including personalised email, calendar, contacts and folders Available from your PC or via your mobile. A managed service

Subscription Office

Microsoft Office Small Business Edition inc. Microsoft Word, Excel, PowerPoint, Publisher and Business

Contact Manager Upgrades to latest releasesEasy monthly payment terms Additional licenses as required

BroadbandProducts & Services

Access

SupportSecurity

Web Hosting

Sales & Support

Local partnerships

One point of contact, One bill

Announcement 1

‘BT Connected and Complete’ featuring Microsoft technology, roll-out from June

and how we will deliver
And how we willdeliver
  • Localsales partnerships
  • National network of sales and service partners
  • Demandgeneration by BT, Microsoft and partners
  • Scotlandroll-out in partnership with Capito
  • Nationalroll-out in September 2004
  • 20local sales and service partnerships by national roll-out
what will the impact be
What will the impact be?

Higher ARPU

Customer Satisfaction Improvements

Increased Customer Loyalty

Greater Profitability

Revenue Growth

so what are we creating
So what are we creating
  • An ecosystem for small and medium businesses
  • Based on a holistic approach
  • Working collaborativelywith world class partners
  • Providing marketing experience and investment to drive forward

“a paradigm shift in the UK smaller business market place’’

Announcement 2Joint marketing programmes between BT and key strategic partners totalling over £17m

and how will we energise
And how will we energise

National

National advertising

National channel reach

CreateAwareness

+ Stimulate Demand

Regional

Local

Regional broadband partnerships

CW2000, ActNow,2004 National eCommerce Awards

Local sales and support partners

Local business community

next steps in our strategy

Mobility

  • Applications
  • Mobile connected devices
  • Access
  • Advanced Capabilities
  • VoIP Solutions
  • Server Solutions
  • SDSL specific applications

Stage 4 - Fully integrated solutions

Next steps in our strategy

Stage 3 - Simple and complete

  • Connected& Complete
  • - Hosted Exchange
  • Subscription Office
  • Business Admin Pack
  • Internet Security Pack

Stage 2 - Applications and Software

Stage 1 - Access, Advice and Support

our ambitions are clear
Stimulate market

Transform small and medium business efficiency through broadband

Our ambitions are clear

Creating a substantialbroadband business

Drive EBIT

Continue the trajectory to profitability

Drive ARPU

Drive significant servicesand applications revenue

Lead the sector

Maintain market share of >50%

q a the time to act is now

Announcement 1:‘BT Connected and Complete’ featuring Microsoft technology, roll-out from June

Announcement 2:Joint marketing programmes between BT and key strategic partners totalling over £17m

Q & AThe time to act is now…
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