About BT Conferencing Video Inc.
The history of BT Group is the history of telecommunications. The company, formerly known as British Telecom and tracing its lineage back to the earliest days of the telegraph, provides phone, internet, and other data and IT services to customers in the UK and abroad. BT operates through several divisions: Corporate clients are served through its BT Global Services unit, BT Business provides communications and IT services in the UK and the Republic of Ireland, and BT Consumer offers consumer fixed-voice and broadband services in the UK. The BT Wholesale and Openreach divisions are devoted to the broadband and local network needs of other carriers. The company expanded its mobile data capabilities with the acquisition of EE in 2016.
The BT Consumer generates more than 20% of sales and offers provides broadband, TV, sports channels, and mobile services. The BT brand combined home phone, broadband, BT TV, BT Sport, and Mobile offerings. The budget Plusnet brand offers similar services but with BT TV replaced by Freeview-style YouView TV.
BT Business serves small and medium-sized enterprises (SMEs) in fixed-voice and data, mobility, and IT services. The segment has a market share of around 30% in fixed-voice and data but just 1% in mobility and 6% in IT services. BT Business accounts for roughly 20% of the BT Group's revenue.
BT Global Services, the group's enterprise telecommunications division, accounts for about 20% of sales. It provides voice and data communications, as well as managed network and IT services to corporate and public sector customers in more than 170 countries. The UK government is its largest client. The segment also operates customer contact and data centers and offers customer relationship management and managed network security.
BT Wholesale provides network services to more than 1,400 communications service providers in the UK. It operates the only network that covers the entire country, and many competitors pay to use its network to enable their own services. BT Wholesale manages the network infrastructure for Virgin Media and KCOM, while O2 and Vodafone use its fixed-line network for their business customers. It brings in about 10% of BT Group's sales.
Openreach is the group's smallest segment with less than 10% of sales. Openreach owns and manages the UK's physical telecommunications infrastructure, which it is legally bound to allow rival telecoms operators to access.
Based in London, BT Group generates more than 75% of its revenue at home in the UK. Internationally, it has staff in some 60 countries worldwide and has customers in around 180, which together account for the remaining 25% of sales. Key European markets for the company include Italy, Germany, and Spain. In North America, BT serves customers from offices in 25 cities. The firm also has a presence in high-growth regions in Asia Pacific, Latin America, the Middle East, and Africa.
Sales and Marketing
BT Group's customers are UK individuals; households; small, medium, and large businesses; public sector organizations; and companies around the world. Some of its customers are also its competitors, such as the major telecoms companies that pay to use its Openreach infrastructure.
The company has a roughly 35% share of the UK's broadband market, serving 9.3 million customers, a 40% share of the home phone market, and a 10% share of the pay-TV market.
BT Group's Global Services segments has some 5,500 customers. Its major accounts bring in some 80% of segment sales, and most operate in multiple countries and region. In the UK it serves principally financial services firms. In Asia, Africa, and the Middle East, where markets are less liberalized, BT Group plays mostly a support role, offering established telecoms companies support in expanding and internationalizing.
Note: Growth rates may differ after conversion to US Dollars.
BT Group has long struggled to sustain meaningful organic growth. Despite the EE acquisition in 2016 that kicked BT Group's revenue to new heights, it was unable to turn growth into momentum and in 2018 saw revenue slip back once more. Total sales fell 1% in fiscal 2018 (ended 31 March) due to poor performances internationally, particularly in Europe, the Middle East, and Africa (excluding the UK).
The Enterprise and Global Services segments fell 4% and 9%, respectively. Lower IP Exchange volumes and equipment sales weighed on sales. Performing better was the broadband and TV business in the UK, which recorded a 5% increase in annual revenue per customer (to £41.7) thanks to higher uptake in mobile and BT Sport, as well as a rise in products sold per customer from 1.98 to 2.03. Calls and lines revenue grew net 2% as growth in mobile more than compensated for continued falls in home phone usage.
BT Group's net income increased 6% to £2.0 billion thanks mostly to a £553 million decrease in operating costs. Cost reductions were in payments to telecommunications operators and lower expenses relating to the EE acquisition.
The company's cash position weakened marginally in fiscal 2018, ending the year £12 million lower at £499 million. BT Group's operating activities bore cash of £4.9 billion, while investing activities absorbed £4.8 billion and financing activities £75 million. The company's primary cash uses were capital expenditures, purchases of financial assets, repayment of borrowings, and dividend payouts. Net debt rose 7% to £9.6 billion during the year.
With the EE acquisition complete, BT is restructuring to better align its units with the marketplace. It is bringing together the BT Consumer and EE divisions into a single Consumer division that will serve UK customers with joined-up mobile, broadband, and television services. The EE integration promises to generate £400 million in savings by the end of the 2019/20 financial year thanks to increased purchasing power and consolidation of back end operations and real estate footprint.
Additionally, BT Group is changing and repositioning some of its less profitable/shrinking units. In 2018 it combined the underperforming Business & Public Sector and Wholesale & Ventures divisions into a single Enterprise division. The realignment should accelerate decision-making and agility.
Aiming to become more predictable and customer-focused, the Global Services segment is undergoing a transformation, which BT Group is calling Digital GS. It has become leaner, especially in Europe where it reduced duplication and combined management and back-end jobs, reducing headcount. It launched a new suite of solutions, called Dynamic Network Services, which includes BT Agile Connect and Bandwidth on Demand. These efforts helped it win a number of significant new clients in 2017/18, including Anglo American (BT Security), Deloitte and Deutsche Post DHL (BT One), and Fujitsu, Hella Group, Mastercard, and Wallenius Wilhelmsen Logistics (BT Connect).
Mergers and Acquisitions
In 218 BT Group acquired IP Trade, a UK provider of communications tools for trading floors and command-and-control dispatch centers.
BT Group dates back to the 1840s and the early days of the telegraph. The UK government took control of the multitude of companies that sprang up and housed them under the Post Office government branch -- then a major department of government. The Post Office telecommunications activities were renamed British Telecom (BT) in 1980, and separated out from the Post Office -- by that point a nationalized industry rather than government department -- in 1981. BT was privatized in 1984 and the telecom market was opened to competition. British Telecom became BT in 1991. In 2005, Ofcom, the regulator, ordered the creation of Openreach, a BT Group company tasked with the management of the UK's telecom infrastructure and allowing unbiased access for rival telecom companies.
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