Blueprint
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the
Securities Exchange Act of 1934
Date of
Announcement: 10 May
2018
BT Group plc
(Translation
of registrant's name into English)
BT
Group plc
81 Newgate
Street
London
EC1A 7AJ
England
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form
20-F..X...
Form 40-F
Indicate
by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.
Yes
No ..X..
If
"Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-
________
May 10,
2018
BT ANNOUNCES STRATEGY UPDATE TO DRIVE LEADERSHIP IN CONVERGED
CONNECTIVITY AND SERVICES
● Our
Strategy will deliver sustainable growth in value by focusing on
delivering differentiated customer experiences, investing in
integrated network leadership, and transforming BT's operating
model
● BT's
scale and market position mean that it is uniquely positioned to
drive network, product and service convergence across consumer and
business markets
●
Actions being taken include:
-
Launching new converged product offerings to deliver differentiated
customer experiences, support customer loyalty and improve economic
returns;
-
Further improving customer experience by increasing FTTP and mobile
infrastructure investment within an annual capex allocation of
around £3.7bn;
-
Transforming BT's operating model and driving productivity
improvements in core UK operations;
-
Accelerating the restructuring and transformation of Global
Services by introducing new digital products with a greater focus
on our top global customers, reducing capital intensity, and
significantly lowering costs;
-
Focusing on around 30 modern, strategic sites to create a more
collaborative, open and customer focused working culture, including
plans to exit BT's headquarters in Central London;
-
A three year reduction of c.13,000 mainly back office and middle
management roles;
-
A year 3 cash cost reduction of £1.5 billion with costs to
achieve of £800 million and two year payback;
-
Cost reductions to help offset near term cost and revenue
pressures, provide capacity to invest in value enhancing projects
and drive longer term profit growth;
-
Hiring c.6,000 new employees to support network deployment and
customer service.
BT
Group today announced an evolution of its strategy to drive
sustainable long term growth in value for shareholders by
maintaining its leading position in converged connectivity and
services in the UK and for multi-national corporations. The
strategy is clearly focused on:
●
Delivering differentiated customer experiences;
●
Investing in integrated network leadership; and
●
Transforming BT's operating model.
Gavin
Patterson, BT Chief Executive, said: "BT is uniquely positioned to
be a leader in converged connectivity and services. We are a clear
market leader in terms of the scale of our customer relationships.
We have the UK's leading fixed and mobile access networks, a
portfolio of strong and well segmented brands, and close strategic
partnerships. We provide products and services that are essential
to both consumers and businesses, delivered through multiple
channels to suit their needs. This position of strength will enable
us to build on the disciplined delivery and risk reduction of the
last financial year, a period during which we delivered overall
in-line with our financial and operational commitments whilst
addressing many uncertainties."
"I am
really excited to be delivering the next stage of BT's
transformation and have put in place the team that will support me
in achieving these objectives."
For
further information on BT's performance over the last financial
year, please see BT Group's full year financial results, also
released today.
Delivering differentiated customer experiences
Putting
the customer at the centre of everything BT does will enable
differentiation through converged products and service quality and
a focus on customer retention. The launch of new converged product
offerings will support customer retention, increase loyalty, and
improve economic returns.
For
example, in the Consumer business, BT will launch converged fixed
and mobile products, and make better use of customer data and
digital channels for more targeted and personalised marketing
complemented by our nationwide retail footprint enabling a local,
and personal, service. In its Enterprise segment, BT will create
new revenue streams alongside existing offerings, such as driving
take-up of Voice over IP, networking and unified communications,
and leveraging its leading security proposition.
BT will
also create new revenue streams in selected adjacency offerings to
add new high-margin revenues. For example, by leveraging our
leading security proposition and utilising the Internet of Things
where we have transformed our own business to reduce costs and the
environmental impact of our operations.
Investing in integrated network leadership
To
deliver differentiated customer experiences, BT will continue to
invest in integrated network leadership. The company aims to have a
single integrated all-IP fibre network that enables seamless
converged access across fixed, WiFi, and mobile, whilst maintaining
capital expenditure discipline within an annual allocation of
around £3.7 billion over the next two years.
In
fixed, Openreach is taking a 'Fibre First' approach that positions
the business to deliver, economically, at scale and pace, 10
million fibre-to-the-premises, FTTP, by the mid-2020's, while in
mobile, BT will continue to build 4G to 95% geographic coverage by
2020 and intends to lead the market in 5G.
Transforming BT's operating model
The
next phase of BT's transformation coincides with changes in the
telecoms market with exponential growth in data consumption and
network capacity requirements and increasing competitive intensity
from established companies and new entrants. At the same time,
recent regulatory outcomes have meant that the return on capital in
Openreach is moving closer to its allowed return, and a new round
of investment has started across fixed and mobile
infrastructure.
It is
critical that BT transforms its operating model to build a lean and
agile organisation that delivers sustained improvement in customer
experience and productivity. BT therefore intends to:
●
Simplify its operating model including fewer, bigger, more
accountable leadership roles and de-layering its management
structures;
●
Drive productivity improvements in its core UK operations,
including process simplification and automation to reduce
costs;
●
Accelerate the restructuring and transformation of Global
Services by introducing new digital products with a greater focus
on our top global customers, reducing capital intensity, and
significantly lowering costs;
●
Focus on around 30 modern strategic sites to create a more
collaborative, open and customer focused working culture, reducing
the inefficiencies that exist by being housed in numerous sites
across the UK. As part of this, BT plans to exit its headquarters
in Central London;
●
Move from buying to strategic sourcing, consolidating our
spend from our current 18,000 suppliers and designing and
standardising our products to meet market needs while reducing the
total cost of ownership;
●
Deliver deeper penetration of digitalisation to improve
customer experience and costs to serve.
These
actions will deliver:
●
A three year reduction of c.13,000 mainly back office and
middle management roles;
●
A year 3 cash cost reduction of £1.5 billion with costs
to achieve of £800 million and 2 year payback;
●
Cost reductions to help offset near term cost and revenue
pressures, provide capacity to invest in value enhancing growth
projects and drive longer term profit growth;
●
c.6,000 new hires to support network deployment and customer
service.
Ends
For further information:
Enquiries
about this news release should be made to the BT Group Newsroom 020
7356 5369. From outside the UK dial + 44 20 7356 5369. All
news releases can be accessed at our web site.
You can also subscribe to receive all BT announcements here and you
can follow us on Twitter here.
About BT
BT's
purpose is to use the power of communications to make a better
world. It is one of the world's leading providers of communications
services and solutions, serving customers in 180 countries. Its
principal activities include the provision of networked IT services
globally; local, national and international telecommunications
services to its customers for use at home, at work and on the move;
broadband, TV and internet products and services; and converged
fixed-mobile products and services. BT consists of four
customer-facing units: Consumer, Enterprise, Global Services and
Openreach.
For the
year ended 31 March 2018, BT Group's reported revenue was
£23,723m with reported profit before taxation of
£2,616m.
British
Telecommunications plc (BT) is a wholly-owned subsidiary of BT
Group plc and encompasses virtually all businesses and assets of
the BT Group. BT Group plc is listed on stock exchanges in London
and New York.
For
more information, visit www.btplc.com
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
BT Group plc
(Registrant)
By: /s/
Dan Fitz, Company Secretary
--------------------
Dan
Fitz, Company Secretary.
Date
10 May 2018