BT Group

Name	BT Group plc
Logo
Type	Public limited company()
Predecessor	Electric Telegraph Company Post Office Telecommunications
Foundation	City of London, United Kingdom ()
Founder	William CookeJohn Ricardo
Location	BT CentreLondon, United Kingdom
Area served	Worldwide
Key people	Ian Livingston (Chief Executive) Michael Rake (Chairman)
Industry	Telecommunications
Products	Telecommunications Broadband internet access Internet Protocol television
Revenue	£20,911 million (2010)
Operating income	£2,600 million (2010)
Homepage	btplc.com
Intl	yes

BT Group plc (, ) is a global telecommunications services company headquartered in London, United Kingdom. It is one of the largest telecommunications services companies in the world and has operations in more than 170 countries. Through its BT Global Services division it is a major supplier of telecoms services to corporate and government customers worldwide. Its BT Retail division is a leading supplier of telephony, broadband and subscription television services in the UK, with over 18 million customers.

Its primary listing is on the London Stock Exchange and it is a constituent of the FTSE 100 Index. It has a secondary listing on the New York Stock Exchange.

History

BT is the world’s oldest telecommunications company. The company's origins date back to the establishment of the first telecommunications companies in the United Kingdom. Among them was the first commercial telegraph service, the Electric Telegraph Company, established in 1846. As these companies amalgamated and were taken over or collapsed, the remaining companies were transferred to state control under the Post Office. These companies were merged and rebranded as British Telecommunications.

18781969: General Post Office

From 1878, the telephone service in the United Kingdom was provided by private sector companies such as the National Telephone Company, and later by the General Post Office. In 1896, the National Telephone Company was taken over by the General Post Office. In 1912, it became the primary supplier of telecommunications services, after the Post Office took over the private sector telephone service in the UK, except for a few local authority services. Those services all folded within a few years, the sole exception being Kingston upon Hull, where the telephone department became present day KCOM Group.

In October 2001, at a general meeting held in Birmingham, 4.297 billion British Telecommunications shares voted in favour of the demerger, and 0.67 million voted against. In , BT Cellnet demerged from BT and was relaunched on as O2.

In February 2004, the company was subject to rumours of take-over bids from KPN, the Dutch telecommunications group though these never came to fruition. In 2005 rumours of KPN (and several other international network operators) bidding for the various branches of O2 persisted, though following the company's posting of better than expected results so soon after demerging some speculation shifted to O2 itself making bids for other businesses.

In March 2005, the company underwent a corporate reorganization, that saw mmO2 plc being de-listed from the London Stock Exchange and acquired (via a share swap) by a new company, O2 plc, which was listed on the London Stock Exchange in its place. The summer of 2005 saw the company under threat of crippling strike action by Communication Workers Union members following disputes over pay and remuneration, though unrelated to earlier job losses as part of the reorganization. This was resolved without strikes taking place after several months of negotiations between the company and the trade union.

20012003: dot.com crash and reorganisation

Following the global stock market based dot com crash, the group undertook a major board restructuring and asset sale to address its debt pile. In May 2001, BT announced a three for ten rights issue to raise £5.9 billion – still the UK's largest ever rights issue – and the sale of Yell Group, the international directories and associated e-commerce business for £2.14 billion. Both activities were completed in June 2001. The group also sold its property portfolio to JV property company Telereal.

20032004: Brand refresh

In April 2003, BT unveiled its current corporate identity and brand values. Reflecting the aspirations of a technologically innovative future, the connected world is designed to embody BT’s five corporate values: trustworthy, helpful, inspiring, straightforward, heart.

The Communications Act, 2003 which came into force on 25 July 2003 introduced a new industry regulator, the Office of Communications (Ofcom), to replace the Office of Telecommunications (Oftel). It also introduced a new regulatory framework. The licensing regime was replaced by a general authorisation for companies to provide telecommunications services subject to general conditions of entitlement and, in some instances, specific conditions. Under a specific condition BT retained its universal service obligation (USO) for the UK, excluding the Hull area. The USO included connecting consumers to the fixed telephone network, schemes for consumers with special social needs, and the provision of call box services.

In the summer of 2004, BT launched Consult 21, an industry consultation for BT’s 21st century network (21CN) programme. 21CN is a next generation network transformation, due for completion by end 2010. Using internet protocol technology, 21CN will replace the existing networks and communications from any device such as mobile phone, PC, PDA or home phone, to any other device.

2005: Openreach

Following the Telecommunications Strategic Review (TSR), in September 2005 BT signed legally binding Undertakings with Ofcom to help create a new regulatory framework for BT and the UK telecoms industry generally.

Openreach provides provision and repair in the "last mile" of copper wire. Formed from 25,000 engineers previously employed by BT's Retail and Wholesale divisions. It is designed to ensure that other communications providers (CPs) have exactly the same operational conditions as parts of the BT group. Opened for business on 11 January 2006, it reports directly into the BT chief executive.

2005: Global expansion

In 2005, BT made a number of important acquisitions.

In February 2005, BT acquired El Segundo, California-based telecoms giant Infonet (now re-branded BT Infonet), giving BT access to new geographies.

It also acquired the second largest telecoms operator in the Italian business market, Albacom.

In April 2005, it bought Radianz from Reuters (now rebranded as BT Radianz), which expanded BT's coverage, provided BT with more buying power in certain countries.

2006present: Recent developments

In August 2006 BT acquired online electrical retailer Dabs.com for £30.6 million. The BT Home Hub manufactured by Inventel was also launched in June 2006.

In October 2006 BT confirmed that it would be investing 75% of its total capital spending, put at £10 billion over five years, in its new Internet Protocol (IP) based 21st century network (21CN). Annual savings of £1 billion per annum are expected when the transition to the new network is complete in 2010, with over 50% of its customers transferred by 2008. That month the first customers on to 21CN was successfully tested at Adastral Park in Suffolk.

In January 2007, BT acquired Sheffield based ISP, PlusNet plc, adding an additional 200,000 customers. BT stated that PlusNet will continue to operate separately out of its Sheffield head-office.

On 1 February 2007 BT announced agreed terms to acquire International Network Services Inc. (“INS”), an intrnational provider of IT consultancy and software. This increases BT presence in North America enhancing BT's consulting capabilities.

On 20 February 2007 Sir Michael Rake, then chairman of accountancy firm KPMG International, would succeed Sir Christopher Bland, who stepped down in September of that year.

On 20 April 2007 BT acquired Comsat International which provides network services to the South American corporate market.

On 1 October 2007 BT purchased Chesterfield based Lynx Technology which has been around since 1973.

BT acquired Wire One Communications in June 2008 and folded the company into BT Conferencing, its existing conferencing unit, as a new video business unit

On 28 July 2008, BT acquired Ribbit, of Mountain View, California, "Silicon Valley's First Phone Company." Ribbit provides Adobe Flash/Flex APIs, allowing web developers to incorporate telephony features into their Software as a Service (SaaS) applications.

On 1 April 2009 BT Engage IT is created from the unclean merger of two previous BT acquisitions Lynx Technology and Basilica. Apart from the name change not much else changes in operations for another 12 months.

On 14 May 2009 BT said it was cutting up to 15,000 jobs in the coming year after it announced its results for the year to 31 March 2009.

In July 2009 BT offered workers a long holiday for an up front sum of 25% of their annual wage or a one-off payment of £1000 if they agree to go part time.

On 5 October 2009 Martin Balaam replaces Nick Gorringe as managing director of struggling division BT Engage IT.

Operations

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.

BT runs the telephone exchanges, trunk network and local loop connections for the vast majority of British fixed-line telephones. Currently BT is responsible for approximately 28 million telephone lines in the UK. Apart from Kingston Communications, which serves Kingston upon Hull, BT is the only UK telecoms operator to have a Universal Service Obligation (USO) which means it must provide a fixed telephone line to any address in the UK. It is also obliged to provide public call boxes.

BT's businesses are operated under special government regulation by the British telecoms regulator Ofcom (formerly Oftel). BT has been found to have Significant Market Power in some markets following Market Reviews by Ofcom. In these markets, BT is required to comply with additional obligations such as meeting reasonable requests to supply services and not to discriminate.

As well as continuing to provide service in those traditional areas in which BT has an obligation to provide services or is closely regulated, BT has expanded into more profitable products and services where there is less regulation. These are principally, broadband internet service and bespoke solutions in telecommunications and information technology.

BT Group is organised into the following business divisions:

BT Retail: Retail telecoms services to consumers

BT Wholesale: Wholesale telecoms core trunk network

Openreach: fenced-off wholesale division, tasked with ensuring that all rival operators have equality of access to BT's own local network

BT Global Services: Business services and solutions (formerly BT Ignite and BT Syntegra)

BT Exact / One IT: used to handle consultancy and internal IT. Now been replaced by BT Innovate and Design.

Group operations: handles security, research and development, and other functions for BT Group Plc such as legal services

From 1 July 2007 two additional divisions were put in place:-

BT Operate took responsibility from BT Wholesale for the roll-out and maintenance of the group's new IP based fixed-line network, known as 21st Century Network (21C).

BT Innovate and Design pulled together IT designers from BT Retail, BT Wholesale, BT Global Services and OneIT to design services on the 21C network.

Corporation

Headquarters

Financial performance

After a pay rise of over 40%, BT's chief financial officer, Hanif Lalani, became one of the very few UK financial directors whose annual remuneration exceeds £1 million. He became CEO of BT Global Services in October 2008 and was replaced as BT Group CFO by Tony Chanmugam on 1 December 2008.

In recent years, the strategy of BT plc has been to reduce its dependence on traditional voice revenues and instead obtain an increasing portion of its turnover from so-called New Wave revenues. At the heart of this strategy is BT Global Services, which has won many significant contracts in the commercial and public sectors, in part through its portrayal as a "momentum story".

Advertising

Logos

Marketing

The Telecommunications Act 1984 set the framework for a competitive market for telecoms services by abolishing BT's exclusive right to provide services. In the early 1990s the market was opened up and a number of new national Public Telecommunications Operators (PTOs) were given licences. This ended the duopoly that had existed in the 1980s when only BT and Mercury were licensed to provide fixed line telecom networks in the UK.

Pension fund

BT has the largest defined benefit pension plan of any UK public company; as of 31 December 2009 the scheme had a deficit of £9 billion. However following a change in the regulations governing inflation index linking, the deficit was estimated at £5.2 billion in November 2010

Environment

In 2004, the BT Group signed the world's largest renewable energy deal with npower and British Gas, and now all of their exchanges, satellite networks and offices are powered by renewable energy. BT is a member of the Corporate Leaders Group on Climate Change. They signed a letter urging the government to do more to tackle this problem. Janet Blake, head of global corporate social responsibility (CSR) at BT, says that she would like to see incentives that find ways of rewarding those companies that focus on climate change by making investments in green business models.

BT has made it clear that it has an ambitious plan to reduce carbon dioxide emissions. Its strategy includes steps to reduce the company's carbon footprint as well as those of customers, suppliers and employees. BT has actually pledged to achieve an 80% reduction by the year 2016, which will require further efficiency improvements.

Controversy

World Wide Web hyperlink patent

In 2001 BT discovered it owned a patent () which it believed gave it patent rights on the use of hyperlink technology on the World Wide Web. The corresponding UK patent had already expired, but the US patent was valid until 2006. Opponents of BT's claim held that the patent had never been valid, due to prior art by both Douglas Engelbart and Ted Nelson's Project Xanadu. Nevertheless on 11 February 2002, BT began a court case relating to its claims in a U.S. federal court against the Internet service provider Prodigy Communications Corporation. The U.S. court ruled on 22 August 2002 that the BT patent was not applicable to Web technology, and granted Prodigy's request for summary judgement. The issue of prior art was thus not addressed.

Behavioural targeting

In early 2008 it was announced that BT had entered into a contract (along with Virgin Media and Talk Talk) with the spyware company Phorm (responsible under their 121Media guise for the Apropos rootkit) to intercept and analyse their users' click-stream data and sell the anonymised aggregate information as part of Phorm's OIX advertising service. The practice, known as "behavioural targeting" and condemned by critics as "data pimping", came under intense fire from various internet communities and other interested-parties who believe that the interception of data without the consent of users and web site owners is illegal under UK law (RIPA). At a more fundamental level, many have argued that the ISPs and Phorm have no right to sell a commodity (a user's data, and the copyright content of web sites) to which they have no claim of ownership. In response to questions about Phorm and the interception of data by the Webwise system Sir Tim Berners-Lee, credited as the creator of the World Wide Web, indicated his disapproval of the concept and is quoted as saying that his data and web history:

See also

UK telephone area codes (STD codes)

Other

BBC news story on BT's claimed 'web patent'

Patent case court judgement against BT

References

External links

BT Group

BT.COM

BT Wholesale

Category:Telecommunications companies of the United Kingdom Category:Internet service providers of the United Kingdom Category:Companies established in 1981 Category:Companies listed on the London Stock Exchange Category:British Royal Warrant holders Category:Organisations based in the City of London