We have performed well this year. We have announced a number of further major investments to support the long-term value of our business. Our goal is to deliver sustainable, profitable revenue growth supported by the investments we are making.

For a summary of our progress this year

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Who we are and what we do

Our purpose is to use the power of communications to make a better world. By bringing together our networks, our technology and the hard work and expertise of our people, we develop services that our customers value.

Who we are 1

We are one of the world’s leading communications services companies

Who we are 2

In the UK we are delivering one of the fastest rollouts of fibre broadband in the world

Who we are 3

We provide managed networked IT services for many of the largest global companies

Who we are 4

We are the leading provider of voice and broadband services to UK SMEs and consumers

Who we are 5

Every day we touch the lives of millions of people, helping them communicate, do business and be entertained and informed

Who we are 6

We are Europe’s largest telecoms services wholesaler by revenue

Financial highlights

Our strategy and business model

Our strategy of broadening and deepening our customer relationships sits at the centre of our business model. Our business creates value for shareholders, by delivering for customers, society and our people.

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Our strategy is to broaden and deepen our customer relationships. That means making sure we stay relevant to them as markets, lifestyles and technologies change. The three pillars of our strategy help us do that: deliver superior customer service; transform our costs; and invest for growth. The better our customer service, the more we will sell and the less time and money we need to spend putting things right. And the better we manage our costs, the better value for money we can offer our customers and the more we can invest in giving customers what they need, today and tomorrow. These principles in turn drive our business model.

Our people, technology, networks and financial strength are key to our business. We invest to build and maintain communications networks in the UK and overseas. We develop products and services that run over those networks – these are our key outputs; and then we sell them on a subscription basis to consumers, businesses and the public sector.

By selling services we are able to make a return on our network investments. But the outcomes of our business are more than just financial. What we do matters. We make connections, create new possibilities and deliver value to individuals, families, businesses, governments, communities, and society in general. And we contribute directly to the health of the UK by providing jobs and paying tax.

We make sure we stay in tune with market and competitive trends, so that we make the right investments and create products and services that customers want to buy. Being able to anticipate and respond to changes in our environment makes for a flexible and sustainable business model. We see more and more demand for our services because they play such an integral role in modern life. So we are confident that we will be able to deliver value today and in the future.

External environment

Governance

Our purpose

To use the power of communications to make a better world

Our goal

A growing BT: to deliver sustainable profitable revenue growth

Our strategy

Broaden and deepen our customer relationships

Deliver superior
customer service

Transform
our costs

Invest for
growth

Fibre

TV and
content

Mobility and
future voice

UK business markets

Leading global companies

Our culture

A healthy organisation

Our values

Customer
We are here for our customers

Team
We help each other achieve more

Honesty
We are honest and respectful

Change
We all make change happen

Pride
We are proud to make a difference

Inputs

Outputs & outcomes

Risks

Inputs
  • We are very focused on growing our cash flow over the long term. Together with a prudent financial policy and a strong balance sheet, we can invest in our business and in the things that set us apart from our competitors.

  • We have almost 90,000 people. Their commitment, expertise and diversity are key to the success of our business.

  • Our networks and platforms are the foundations of the products and services that we sell. We continue to invest in these to improve the service we offer our customers.

  • We are one of the largest investors in research and development in the UK.

  • They include: customers, communities, shareholders, lenders, our pension schemes, suppliers, government and regulators.

  • We use some natural resources in doing business. Our energy use has declined for the sixth consecutive year.

Outputs
  • We invest in our people so that they are better equipped to do their jobs and are more engaged. And we encourage them to volunteer to benefit the communities we serve.

  • Our products range from fixed and mobile telephony and broadband services for UK households through to managing the networks and communication needs of some of the world’s largest multinational companies.

  • We have a long history of innovation. It helps us offer new and improved services, find better ways of doing things and can generate valuable intellectual property for us.

  • Our operations produce waste and emissions but we are working to minimise these.

Outcomes
  • The group’s financial results and our progress against our KPIs are the key commercial outcomes of our activities.

  • Our lines of business sell our products and servies and put our strategy into action.

  • Our brand is a key asset. Our investments in areas such as BT Sport have increased its value.

  • We are increasing digital inclusion and helping people get the most from being online. Our people and platforms support a number of good causes.

  • We provide innovative ways for our customers and suppliers to reduce their waste and carbon emissions.

Lines of business

Our business is structured to best serve our customers – responding to their needs and delivering value to them. We have five customer-facing lines of business: BT Global Services, BT Business, BT Consumer, BT Wholesale and Openreach. They are supported by our internal service unit, BT Technology, Service & Operations.

BT Global Services

We are a global market leader for managed networked IT services.

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We have consolidated our position as a global market leader for managed networked IT services. We help around 6,500 large corporate and public sector customers, in more than 170 countries worldwide, to embrace the digital age, innovate and work more efficiently.

We deliver value to our customers by combining our products and services with industry-specific solutions and consulting expertise. We operate globally and deliver locally, to help our customers make connections and create new possibilities.

We put our customers at the heart of our decision-making and have made progress in improving customer service. By increasing the speed of delivery of our main products, we improved our Right First Time measure by 8.6%. We have enhanced our global capabilities by extending the reach and features of our services. And we launched new solutions including security, cloud-based and unified communications services.

We grew underlying revenue excluding transit in the high-growth regions and Continental Europe. But lower public sector revenue resulted in overall revenue declining. We focused on transforming our cost base, for instance, simplifying our organisational structure in Switzerland and Eastern Europe and improving the process for ceasing access circuits which we no longer need. This meant we grew EBITDA, despite the decline in revenue.

Our operating cash inflow of £349m was lower than we achieved last year, when we had benefited from some early customer receipts. But our EBITDA less capital expenditure measure has continued to grow. We achieved an order intake of £6.5bn, down 7% reflecting large re-signs last year.

BT Global Services 12-month rolling EBITDA less capital expenditure

Year ended 31 March

BT Business

BT Business provides communications and IT services in the UK and the Republic of Ireland.

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BT Business provides communications and IT services in the UK and Republic of Ireland. We serve around 900,000 customers.

We are focused on serving small and medium-sized enterprises (SMEs) in three main markets: fixed-voice and data; mobility; and IT services. We have a market share of around 30% in fixed-voice and data but just 1% in mobility and 6% in IT services. We expect these markets to increasingly converge over the next few years as technology and customer needs change. And as they do, we see an opportunity to grow our share of the mobility and IT services markets.

To help achieve this, we launched a number of new products in the year including BT One Phone, BT Cloud Voice and BT Cloud Phone. We relaunched BT Business Mobile, adding 4G access and unlimited wi-fi for all new and re-signing customers. Our proposed acquisition of EE will let us accelerate the sale of converged fixed-mobile services to our existing business customers as well as offer new services.

We have invested in improving our customer service. We provided 35,000 hours of training to improve the skills of our service teams. We have moved more customers onto our new UK Business Solution system, which makes it easier to serve customers with multiple products. And we have improved our online ‘self-service’ capabilities. These all contributed to our Right First Time measure improving 5.1%.

Underlying revenue excluding transit was down 1% due to lower line and call volumes. But we have increased EBITDA for the third year running through our cost transformation activities, including a 10% reduction in our total labour resource, the merger of two of our IT services units and by renegotiating supplier contracts. Our order intake was broadly level for the year at £2.1bn.

BT Business 12-month rolling order intake

Year ended 31 March

BT Consumer

We are the largest provider of consumer fixed-voice and broadband services in the UK.

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We are the largest provider of consumer fixed-voice and broadband services in the UK. We are focused on top and bottom-line growth through selling broadband, TV, exclusive sports channels and mobile services to our customers.

We grew our share of the DSL and fibre broadband market for the sixth year in a row and we have added the most broadband customers of any operator for six quarters running. Customers continue to want faster broadband. 39% of our retail broadband customers are now on fibre. We also sell services through our Plusnet brand. Plusnet has won numerous awards for customer service and value, and helps us address more price-conscious customers.

As well as driving take-up of broadband, we have invested in our TV service. We launched TV Everywhere, which means customers can watch TV channels on multiple devices, and introduced Netflix and a range of new packages. And we are very pleased with the games that we won in the auction for the 2016/17 to 2018/19 FA Premier League broadcast rights. We will be showing 42 Premier League matches each season. That is four more than we currently show, including a live Saturday evening game almost every Premier League weekend.

We re-entered the consumer mobile market this year. All our mobile plans come with 4G, unlimited texts, unlimited access to BT Wi-fi hotspots in the UK and to the BT Sport app, at no extra cost. Our planned acquisition of EE will mean we can provide a full range of innovative communications services to both EE and BT customers.

We hired hundreds of new contact centre staff. We were able to resolve 20% more customer issues in a single call. Our Right First Time measure improved 1.9%. Our revenue grew 7% this year, reflecting the growth in our broadband and BT Sport customer bases. EBITDA was up 24%.

BT’s retail broadband market share

At 31 March

BT Wholesale

BT Wholesale provides services in Great Britain to more than 1,400 communications providers.

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BT Wholesale provides services in Great Britain to more than 1,400 communications providers (CPs). We help them achieve their goals by offering them innovative, reliable and cost-effective products and services that complement their own capabilities. This means that we can share in their success.

The market for wholesale services is shrinking as some CPs are building more of their own network infrastructure. It is also highly competitive. But the market for next-generation services, including Ethernet, is expanding.

We have sought to stand out from the competition by providing new services and a better customer experience. We have extended our Hosted Communications Services portfolio and expanded our Ethernet network. And we launched Business Zone – a self-service portal through which CPs can manage their orders and any faults.

We improved our billing and repair processes, so we can answer calls and queries more quickly. We moved our service colleagues into fewer service centres, with a view to increasing the level of expertise available to each caller. Overall, we increased customer satisfaction significantly. And our Right First Time performance was up 4.4%. But our service performance on Ethernet was mixed and it took us longer to provide Wholesale Ethernet than we would have liked.

Underlying revenue excluding transit fell 7%. This reflected a large contract termination, regulatory price changes following Ofcom’s 2013 Narrowband Market Review and a generally tougher trading environment.

We reduced our selling and general administration costs by 20%. But this was not enough to offset the decline in revenue and EBITDA fell 9%. Our order intake was £1.9bn, the same as last year.

BT Wholesale 12-month rolling order intake

Year ended 31 March

Openreach

Openreach provides the vital infrastructure that is the foundation of the UK’s vibrant internet economy.

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Openreach provides the vital infrastructure that is the foundation of the UK’s vibrant internet economy.

We are responsible for providing services over the local loop or local access network, sometimes referred to as ‘the last mile’. This consists of the copper and fibre connections between our exchanges and homes and businesses.

We have now passed more than 22m premises with our superfast fibre broadband network. That is more than three-quarters of the UK. We achieved 1.5m fibre broadband net connections in the year. This means that around 4.2m homes and businesses in the UK are now connected – 19% of those passed.

In January 2015 we set out our ultrafast broadband vision for the UK. Using G.fast technology, we expect to offer initial speeds of a few hundred megabits per second to millions of homes and businesses by 2020. As further industry standards are secured, we expect speeds to increase to up to 500Mbps to most of the UK within a decade.

The number of physical lines increased by 215,000 in the year. The number of copper and fibre broadband users on our network rose by 851,000.

We achieved the minimum service levels set by Ofcom, exceeding all 60 measures, though our ambition and plans are to further improve customer service. To help us do this, we hired more than 2,500 new engineers. Our Right First Time measure was up 3.5%, exceeding our target.

Revenue declined 1%, with regulatory price reductions offsetting the impact of fibre revenue growth. Our operating costs were 2% lower which meant EBITDA was flat. Cost efficiencies offset increased volumes, pay increases and the additional engineering resource we recruited to support our provision and repair performance.

Openreach fibre premises passed and take-up

Year ended 31 March

BT Technology, Service & Operations

BT TSO is our internal service unit that is responsible for delivering and operating our networks, platforms and IT systems.

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BT TSO is our internal service unit. It is responsible for delivering and operating our networks, platforms and IT systems.

BT TSO works closely with each of our customer-facing lines of business. We create new products for them and make sure that our existing services evolve to meet the changing needs of their customers.

This year we upgraded our core IP network to handle record volumes of data traffic in the UK. Our IT reliability has improved for the fourth consecutive year and the operational reliability of our core voice and broadband network platforms has hit a five-year high.

We are also responsible for managing the group’s energy consumption and for putting strategies in place to cut the group’s carbon footprint. We have reduced energy usage for six consecutive years*.

BT TSO manages most of our research and development and is also responsible for our worldwide patent portfolio of over 4,500 patents and applications.

BT has a long history of innovation and has pioneered many of the technologies that our business was built upon. In 1926 we held the world’s first two-way, trans-Atlantic conversation by radio telephone from our wireless station near Rugby. And in 1943, Tommy Flowers, working in the telecommunications division of the General Post Office (as we were at the time), developed the world’s first programmable electronic computer, Colossus. In 1968, we installed the world’s first digital telephone exchange. And we laid the world’s first, purpose-designed optical fibre submarine cable in Loch Fyne, Scotland in 1980.

*We have restated our worldwide energy consumption and GHG emission figures for previous years following improvements to our data. Previous estimates of energy usage have been updated with measured figures.

BT’s worldwide energy use*

Year ended 31 March

Our leadership

The Board is responsible for the group’s strategy and for overseeing the group’s performance, and delegates day-to-day responsibility to executive management. But there are a number of matters reserved to the Board.

The Operating Committee has collective responsibility for running our business end to end and delivering our strategy. It monitors the group’s financial, operational and customer service performance and has cross-business oversight of the lines of business. It also reviews the group’s key risks and considers the potential threats to and opportunities for the business.

1984-2012

Three billion British Telecom shares went on sale 3 December

1984

Open for business. Three billion British Telecom shares went on sale 3 December

The first stock market flotation of a major utility helped to create a new type of share ownership – one where anyone could join in. It gave BT the freedom to invest, innovate and develop to better meet the demands of the market and of customers.

The world’s first commercial single mode optical fibre link

1984

The world’s first commercial single-mode optical fibre link

Running between Luton and Milton Keynes, these revolutionary 140 Megabits per second optical fibre cables replaced traditional copper. Lighter and thinner, they carried more information over longer distances. Fibre cables are also easier to install and maintain, this link taking just 38 days to get up and running.

It’s good to talk

1985

It’s good to talk – wherever you are

On 7 January 1985, together with Securicor, we launched Cellnet, the first commercial cellular radio service. Uniquely, we combined our network expertise with our partner’s handset skills to be the first to offer something more, useful and new. Now 30 years on, we have our BT Mobile service and announced our proposed acquisition of EE.

The world’s first international, optical fibre undersea cable

1986

The world’s first international, optical fibre undersea cable

Our cableship Alert laid the submarine cable between Broadstairs in Kent and Ostend in Belgium. By allowing direct communication, it did away with the delays and echoes that plagued satellite calls. And by transmitting far more information at much higher speeds, it transformed the likes of Europe’s financial sector. A short step across the Channel, but the first in what’s now a global network of undersea fibre cables.

The world’s first fully digital long distance network

1990

The world’s first fully digital long distance network

The first such major transition in the world, BT’s long distance network turned completely digital on 3 July after five years of intense work. Processors now controlled the exchanges, generating relevant, real-time data and continuously feeding it to the network managers. So problems could be identified and remedied, often before customers became aware of them.

Switched on as always

2002

Switched on – as always

Arguably the biggest step change in day-to-day communications, ‘always on’ BT Broadband was launched in April 2002. For those with a phone line, it was the simple, one stop shop and – just over a decade ago – a massive change in how we all kept in touch, did business and entertained ourselves. What’s more, all it needed was a ‘plug and play’ set-up that anyone could install.

The London 2012 Olympic and Paralympic games, the most connected games yet.

2012

The London 2012 Olympic and Paralympic games, the most connected games yet.

The facts tell the story: 4 billion people watching, 27,500 journalists reporting, 14,700 athletes contacting home. Around four times the data needs of the Beijing Games in 2008. But unlike those Games, 2012 was run from one integrated network. With 80,000 connections, 16,500 phone lines and 14,000 cable TV outlets in 94 locations. That was our innovative and resilient solution for the ultimate ‘right first time’ challenge. Like everyone involved, we’re proud to have been part of it.

2014-2015

View video transcript

Speeding up the real world

The Transmission, Futures and Innovation Technology team, based at Adastral Park, were instrumental in setting the record for the fastest data transmission speed over an operational optical fibre link. Dr. Kevin Smith, who has been with BT for 25 years, explains the innovation behind his team's achievement and the benefits it can bring to our network and our customers.

View video transcript

The Openreach Next-Generation Field Apps

With millions of customers to support, getting the right engineer, with the right skills, to the right location, at the right time, can be a major challenge. To dispense with the enormous amounts of paperwork each job used to generate, we created our Openreach Next-Generation Field Apps.

Click on happiness

Click on happiness

We’re working with Coca-Cola to bring free internet access to impoverished communities in South Africa. Like all good ideas, it’s simple. Coca-Cola’s dispensing machines are everywhere, so where better to find web access than alongside your cold drink?

What’s on TV next?

What’s on TV next?

These days we expect to be able to watch whatever programmes we want, when we want and wherever we want. Of course, we’re in the thick of this. We use the power of broadband to help people get the TV they want, in the manner they want.

The future

View video transcript

We never stand still

Coming up with new ideas and developing new technologies is core to what we do at BT. In the accompanying video Dr.Tim Whitley, Managing Director, Research & Innovation and Adastral Park gives you an idea of the range of those ideas, designed to push technology further than before. All intended to improve people’s lives in welcome, relevant and affordable ways.