BT Group

BT Group plc
BT
Formerly
 British Telecom
Public limited company
Traded as LSE: BT.A
NYSE: BT
FTSE 100 Component
Industry Telecommunications
Predecessor
Founded 1969 (1969)
Headquarters BT Centre, London, EC1, United Kingdom
Area served
 Worldwide
Key people
Products
Revenue Increase £24.062 billion (2017)[1]
Increase £4.135 billion (2017)[1]
Decrease £1.908 billion (2017)[1]
Owner
Number of employees
 106,400 (2017)[2]
Divisions
Subsidiaries
Website www.btplc.com

BT Group plc (trading as BT and formerly British Telecom) is a British multinational telecommunications holding company headquartered in London, United Kingdom. It has operations in around 180 countries and is the largest provider of fixed-line, broadband and mobile services in the UK, and also provides subscription television and IT services.[3]

BT's origins date back to the founding of the Electric Telegraph Company in 1846 which developed a nationwide communications network. In 1912, the General Post Office, a government department, became the monopoly telecoms supplier in the United Kingdom. The Post Office Act of 1969 led to the GPO becoming a public corporation. British Telecommunications, trading as British Telecom, was formed in 1980, and became independent of the Post Office in 1981. British Telecommunications was privatised in 1984, becoming British Telecommunications plc, with some 50 percent of its shares sold to investors. The Government sold its remaining stake in further share sales in 1991 and 1993. BT is a Royal Warrant holder of the British Royal Family and has a primary listing on the London Stock Exchange, a secondary listing on the New York Stock Exchange, and is a constituent of the FTSE 100 Index.

BT controls a number of large subsidiaries. BT Global Services division supplies telecoms services to corporate and government customers worldwide,[4] and its BT Consumer division supplies telephony, broadband, and subscription television services in Great Britain to around 18 million customers.[5] In January 2016, BT acquired EE for £12.5 billion.

History

BT's origins date back to the establishment of the first telecommunications companies in Britain. 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 in 1912. These companies were merged and rebranded as British Telecom.[6]

1878 to 1969

The BT Tower, originally the Post Office Tower, completed 1964

In 1878 Alexander Graham Bell demonstrated his recently developed telephone to Queen Victoria at Osborne House on the Isle of Wight.[7] A few days later the first telephone in Britain was installed, under licence from the General Post Office, by engineers from David Moseley and Sons, to connect the Manchester premises of hardware merchant John Hudson with his other premises in nearby Shudehill.[7] The first telephone exchange, allowing any of an area's phones to be connected with any other, was opened in London in August 1879, soon followed by one in Manchester.[7] From 1878 on, telephone service in Britain was provided by private companies such as the National Telephone Company. 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 telephone service in Britain, except for a few local authority services.[6]

Public corporation

Converting the Post Office into a nationalised industry, as opposed to a governmental department, was first discussed in 1932; a report on the subject that year was rejected.[8] In 1961, more proposals were ignored. [6]

On 1 October 1969, under the Post Office Act of 1969, the Post Office ceased to be a government department and it became established as a public corporation. The Act gave the Post Office the exclusive privilege of operating telecommunications systems with listed powers to authorise others to run such systems. Effectively, the General Post Office retained its telecommunications monopoly.[6]

1970 to 1990

Logo used from 1980 to 1991

In 1977, the Carter Committee Report recommended a further division of the two main services and for their relocation under two individual corporations. The findings contained in the report led to the renaming of Post Office Telecommunications as British Telecommunications (trading as British Telecom) in 1980, although it remained part of the Post Office.[6]

The British Telecommunications Act 1981 transferred the responsibility for telecommunications services from the Post Office, creating two separate corporations, Post Office Ltd and British Telecommunications. At this time the first steps were taken to introduce competition into British telecommunications industry. In particular, the Act empowered the Secretary of State for Trade and Industry, as well as British Telecommunications, to license other operators to run public telecommunications systems. Additionally, a framework was established which enabled the Secretary of State to set standards with the British Standards Institution (BSI) for apparatus supplied to the public by third parties, and had the effect of requiring British Telecommunications to connect approved apparatus to its systems. The Secretary of State made use of these new powers and began the process of opening up the apparatus supply market, where a phased programme of liberalisation was started in 1981. In 1982, a licence was granted to Cable & Wireless to run a public telecommunications network through its subsidiary, Mercury Communications Ltd.[6][9]

On 19 July 1982, the Government formally announced its intention to privatise British Telecommunications with the sale of up to 51% of the company's shares to private investors. This intention was confirmed by the passing of the Telecommunications Act 1984, which received Royal Assent on 12 April that year. The transfer to British Telecommunications plc of the business of British Telecommunications, the statutory corporation, took place on 6 August 1984 and, on 20 November 1984, more than 50 per cent of British Telecommunications shares were sold to the public. At the time, this was the largest share issue in the world.[10]

The new legislation was intended to enable British Telecommunications to become more responsive to competition in GB and to expand its operations globally. Commercial freedom granted to British Telecommunications allowed it to enter into new joint ventures and, if it so decided, to engage in the manufacture of its own apparatus. The company's transfer into the private sector continued in December 1991 when the Government sold around half its remaining holding of 47.6% of shares, reducing its stake to 21.8%. Substantially all the government's remaining shares were sold in a third flotation in July 1993, raising £5 billion for the Treasury and introducing 750,000 new shareholders to the company.[11]

The 1984 Act also abolished British Telecommunications's exclusive privilege of running telecommunications systems and established a framework to safeguard the workings of competition. This meant that British Telecommunications finally lost its monopoly in running telecommunications systems, which it had technically retained under the 1981 Act despite the Secretary of State's licensing powers. It now required a licence in the same way as any other telecommunications operator. The principal licence granted to British Telecommunications laid down strict and extensive conditions affecting the range of its activities, including those of manufacture and supply of apparatus.[6]

In 1985, Cellnet was launched as a subsidiary of Telecom Securicor Cellular Radio Limited, a 60:40 venture between British Telecommunications and Securicor respectively. Securicor originally invested £4 million in Cellnet in 1983. In 1999, BT purchased Securicor's shares in Cellnet for £3.15 billion. The company was later rebranded as BT Cellnet, and became a part of BT Wireless, a group of subsidiary companies owned by BT.[12]

The next major development for British Telecommunications, and a move towards a more open market in telecommunications, occurred in 1991. On 5 March, the Government's White Paper, "Competition and Choice: Telecommunications Policy" for the 1990s, was issued. In effect, it ended the duopoly which had been shared by British Telecommunications and Mercury Communications in the UK since November 1983 and the build-up to privatisation. The new policy enabled customers to acquire telecommunications services from competing providers using a variety of technologies. Independent "retail" companies were permitted to bulk-buy telecommunications capacity and sell it in packages to business and domestic users. The White Paper was endorsed by British Telecommunications, the new policy enabling the company to compete freely and more effectively by offering flexible pricing packages to meet the needs of different types of customer.[13]

1991 to 2006

The BT brand and piper logo were introduced in 1991. The logo remained until 2003.

On 2 April 1991, the company started using a new trading name, BT, and new branding.[6]

In June 1994, BT and MCI Communication Corporation, the second largest carrier of long distance telecommunications services in the United States, launched Concert Communications Services, a $1 billion joint venture company. This alliance gave BT and MCI a global network for providing end-to-end connectivity for advanced business services. Concert was the first company to provide a single-source broad portfolio of global communications services for multinational customers. On 3 November 1996, BT and MCI announced they had entered into a merger agreement to create a global telecommunications company called Concert plc, to be incorporated in GB, with headquarters in both London and Washington, D.C. As part of the alliance BT acquired a 20% holding in MCI. Nevertheless, following US carrier WorldCom's rival bid for MCI on 1 October 1997, BT ultimately decided in November, to sell its stake in MCI to WorldCom for $7 billion. The deal with WorldCom resulted in a profit of more than $2 billion on BT's original investment in MCI, with an additional $465 million severance fee for the break-up of the proposed merger.[6]

In December 2000, following modifications to BT's licence in April 2000, BT offered local loop unbundling (LLU) to other telecommunications operators, enabling them to use BT's copper local loops (the connection between the customer's premises and the exchange) to connect directly with their customers.[14]

BT offices in Madrid, Spain

Following the dot com crash, the group undertook a board restructuring and asset sale to address its large debts. In May 2001, BT announced a three-for-ten rights issue to raise £5.9 billion—still GB's largest ever rights issue—and the sale of Yell Group, the international directories and associated e-commerce business, for £2.14 billion.[15] Both activities were completed in June 2001. The group also sold some of its property portfolio to Telereal Trillium, a property company.[16]

BT renamed its BT Wireless division as O2 in September 2001,[17] and confirmed it planned to demerge the unit in November that year. Shareholders approved the demerger at an extraordinary general meeting held in Birmingham in October 2001, with 4.297 billion British Telecommunications shares voted in favour, and 0.67 million voted against.[18] BT Wireless demerged in 2001, and was relaunched on 18 June 2002 as O2. O2 was acquired by Telefónica in 2005.[19]

In April 2003, BT unveiled its current corporate identity, known as the "Connected World", and brand values.[20] 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 globe device part of the logo was originally designed by the Wolff Olins brand consultancy for BT's Concert joint venture with AT&T, and was subsequently used by BT's internet division, Openworld, prior to being adopted by the company as a whole.[20]

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 GB, 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.[6]

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, that, at one time, was due for completion by the end of 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.[21]

In 2004, BT was awarded the contract to deliver and manage N3, a secure and fast broadband network for the NHS National Programme for IT (NPfIT) program, on behalf of the English National Health Service (NHS).[22]

In 2005 BT made a number of important acquisitions. In February 2005, BT acquired Infonet (now re-branded BT Infonet), a large telecoms company based in El Segundo, California, giving BT access to new geographies. It also acquired the second largest telecoms operator in the Italian business market, Albacom. Then in April 2005, it bought Radianz from Reuters (now rebranded as BT Radianz), which expanded BT's coverage and provided BT with more buying power in certain countries.[23]

In August 2006, BT acquired online electrical retailer Dabs.com for £30.6 million.[24] The BT Home Hub manufactured by Inventel was also launched in June 2006.[25]

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 were expected when the transition to the new network was to have been completed in 2010, with over 50% of its customers to have been transferred by 2008. (For actual progress see BT 21CN). That month the first customers on to 21CN was successfully tested at Adastral Park in Suffolk.[26]

2007 to 2012

In January 2007, BT acquired Sheffield-based ISP, PlusNet plc, adding 200,000 customers. BT stated that PlusNet will continue to operate separately out of its Sheffield head-office.[27] On 1 February 2007, BT announced agreed terms to acquire International Network Services Inc. (INS), an international provider of IT consultancy and software.[28]

In February 2007, Sir Michael Rake succeeded Sir Christopher Bland.[29] In April that year, they acquired COMSAT International,[30] followed in October by the acquisition of Lynx Technology.[31]

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[32] In July 2008, BT acquired the online business directory firm Ufindus for £20 million in order to expand its position in the local information market in GB.[33] 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.[34]

In the early days of its fibre broadband rollout, BT said it would deliver fibre-to-the-premises (FTTP) to around 25% of the Country, with the rest catered for by the slower fibre-to-the-cabinet (FTTC), which uses copper wiring to deliver the final stretch of the connection. In 2014, with less than 0.7% of the company's fibre network being FTTP, BT dropped the 25% target, saying that it was "far less relevant today" because of improvements made to the headline speed of FTTC, which had doubled to 80Mbit/s since its fibre broadband rollout was first announced.[35] To supplement FTTC, BT offered an 'FTTP on Demand' product.[36] In January 2015, BT stopped taking orders for the on-demand product.[37]

On 1 April 2009, BT Engage IT was created from the merger of two previous BT acquisitions, Lynx Technology and Basilica. Apart from the name change not much else changed in operations for another 12 months.[38] 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.[39] Then 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.[40]

On 6 April 2011, BT launched the first online not-for-profit fundraising service for UK charities called BT MyDonate as part of its investment to the community. The service will pass on 100% of all donations made through the site to the charity, and unlike other services which take a proportion as commission and charge charities for using their services, BT will only pass on credit/debit card charges for each donation. The service allows people to register to give money to charity or collect fundraising donations. BT developed MyDonate with the support of Cancer Research UK, Changing Faces, KidsOut, NSPCC and Women's Aid.[41][42][43]

2013 to present

In March 2013, BT was allocated 4G spectrum in the UK following an auction and assignment by Ofcom, after paying £201.5m.[44]

On 1 August 2013, BT launched its first television channels, BT Sport, to compete with rival broadcaster Sky Sports.[45] Plans for the channels' launch came about when it was announced in June 2012 that BT had been awarded a package of broadcast rights for the Premier League from the 2013–14 to 2015–16 season, broadcasting 38 matches from each season.[46] In February 2013, BT acquired ESPN Inc.'s UK and Ireland TV channels, continuing its expansion into sports broadcasting.[47] ESPN America and ESPN Classic were both closed, while ESPN continued to be operated by BT. On 9 November 2013, BT announced it had acquired exclusive rights to the Champions League and Europa League for £897m, from the 2015 season, with some free games remaining including both finals.[48]

On 1 November 2014, BT created a new central business services (CBS) organisation to provide customer services and improve operational efficiency levels.[49]

On 24 November 2014, shares in BT rose considerably on the announcement that the company was in talks to buy back O2, while at the same time confirmed it was also in talks to acquire EE.[50] BT subsequently entered into exclusive talks to buy EE for £12.5 billion on 15 December 2014[51][52] and confirmed on 5 February 2015, subject to regulatory approval. The deal will combine BT's 10 million retail customers and EE's 24.5 million direct mobile subscribers. Deutsche Telekom will own 12% of BT, while Orange S.A. will own 4%.[53]

In March 2015, launched a 4G service as BT Mobile[54] BT Group CEO Gavin Patterson announced that BT plans to migrate all of its customers onto the IP network by 2025, switching off the company's ISDN network.[55]

On 15 January 2016, BT received final unconditional approval by the Competition and Markets Authority to acquire EE.[56] The deal was officially completed on 29 January 2016 with Deutsche Telekom now owning 12% of BT, while Orange S.A. own 4%.[57]

On 1 February 2016, BT announced a new organisational structure that will take effect from April 2016 following the successful acquisition of EE. The EE brand, network and high street stores will be retained and will become a second consumer division, operating alongside BT Consumer. It will serve customers with mobile services, broadband and TV and will continue to deliver the Emergency Services Network contract which was awarded to EE in late 2015. There will be a new BT Business and Public Sector division that will have around £5bn of revenues and will serve small and large businesses as well as the public sector in the UK and Ireland. It will comprise the existing BT Business division along with EE's business division and those parts of BT Global Services that are UK focused. There will also be another new division; BT Wholesale and Ventures that will comprise the existing BT Wholesale division along with EE's MVNO business as well as some specialist businesses such as Fleet, Payphones and Directories. Gerry McQuade, currently Chief Sales and Marketing Officer, Business at EE, will be its CEO.[58][59][60]

On 8 June 2017, BT appointed KPMG as its new auditor to replace PwC in the wake of the fraud scandal in Italy that triggered a major profit warning earlier this year.[61] In last April, KPMG fired six US employees over a scandal that calls into question efforts to ensure that public company accounts are being properly scrutinised.[62]

On 8 July 2017, The Daily Telegraph reported that BT "has called in consultants from McKinsey to conduct a review of its businesses in the hope of saving hundreds of millions of pounds per year. The work, dubbed 'Project Novator', is understood to include a potential merger of BT’s struggling global services corporate networking and IT unit with its business and public sector division".[63]

On 28 July 2017, BT announced organisational changes to "simplify its operating model, strengthen accountabilities and accelerate its transformation" and involves bringing together its BT Consumer and EE divisions into a new unified BT Consumer division that will operate across three brands – BT, EE and Plusnet.[64][65][66][67] It will take effect from 1 April 2018.[68]

On 18 April 2018, BT announced further organisational changes following unification of its BT Consumer and EE divisions, and involves bringing together its BT Business and Public Sector and BT Wholesale and Ventures divisions into a new unified division known as BT Enterprise. It will also include BT's Ventures business which "acts as an incubator for potential new growth areas of the company" and will report as a single unit from 1 October 2018.[69][70][71][72]

Operations

The Adastral Park campus at Martlesham Heath in Suffolk, the principal site of BT Research.

BT Group is a holding company; the majority of its businesses and assets are held by its wholly owned subsidiary British Telecommunications plc.[73] 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.[74]

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 GB. Apart from KCOM Group, 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.[75]

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.[76]

Corporate affairs

Buildings and facilities

As BT operates in around 180 countries, it owns and leases a range of buildings and facilities in the UK and around the world. In 2001, it sold some of its UK property portfolio for £2.38 billion to Telereal Trillium in a 30-year leaseback. The deal included 6,700 properties and contributed towards alleviating its debt at the time, with the main advantage being flexibility as it allows BT to vacate property over time, so as to adapt to changing operational requirements.[16]

Headquarters

The BT Centre was completed in 1985.

BT Group's world headquarters and registered office is the BT Centre, a 10-storey office building at 81 Newgate Street in the City of London, opposite St. Paul's tube station.[77]

Buildings and stations

Some of its UK buildings and stations are:

Telecommunications towers

BT remains one of the largest owners of telecommunications towers in the UK and were a major node in its microwave network. Its BT Tower in London is most notable for numerous reasons such as being the tallest building in the UK from its construction in the 1960s until the early 1980s, its revolving restaurant at the top known as 'Top of the Tower' in operation through the late 1960s and 1970s, and remains one of the UK’s most important communications nerve centres, the heart of a vast broadcasting and communications network. It carries approximately 95% of the UK's TV content, including live broadcasts and 99% of all live football games as well as pinoneering the first international HD, 3D and 4K television transmissions. It serves media production and distribution customers around the world and as part of the Things Connected Network launched in London, it became the highest building in the world to host an Internet of Things (IoT) base station in September 2016.[78][79] Some of its towers are:

Other

Some of its other UK facilities are:

Divisions

BT Group is organised into the following divisions:[73]

Customer facing

  • BT Consumer – provides retail telecoms services to consumers in the UK including:
  • EE – mobile network operator, provides mobile and fixed communications services to consumers in the UK
  • BT Business and Public Sector – provides retail telecoms and IT services to businesses and the public sector in the UK and Ireland
  • BT Global Services – provides telecoms and IT services to multinationals
  • BT Wholesale and Ventures – provides network products and services to communications providers (CPs), voice services to UK customers via 999, 118 500 and Next Generation Text Service, services for media companies and broadcasters and its ventures side encompasses a portfolio of businesses offering a range of products and services
  • Openreach – fenced-off wholesale division, established in 2005 following a review by Ofcom and commenced operations in 2006, employing 25,000 engineers previously employed by BT. Its purpose is to ensure that other communications providers have the same operational conditions as BT, and is responsible for the provision and repair in the "last mile" of copper wire.[80]

Internal service unit

  • BT Technology, Service & Operations – responsible for the innovation, design, test, build and operation of BT’s global networks and systems[73]

Corporate governance

CEO Gavin Patterson at the 2016 Chatham House Corporate Leaders Series.

BT's current board of directors as of September 2018:[81]

BT's current executive committee as of March 2018:[82]

  • Gavin Patterson – Chief executive officer
  • Simon Lowth – Chief financial officer
  • Marc Allera – CEO of BT Consumer
  • Bas Burger – CEO of BT Global Services
  • Sabine Chalmers – General counsel
  • Gerry McQuade – CEO of BT Enterprise (BT Business and Public Sector and BT Wholesale and Ventures)
  • Ed Petter – Corporate affairs director
  • Cathryn Ross – Director of regulatory affairs
  • Michael Sherman – Chief strategy and transformation officer
  • Howard Watson – Chief technology and information officer (CTIO) of BT Technology, Service & Operations
  • Alison Wilcox – HR director
  • Dan Fitz – Company secretary
  • Clive Selley – CEO of Openreach

Pension fund

BT has the largest defined benefit pension plan of any UK public company. The trustees valued the scheme at £36.7 billion at the end of 2010;[83] an actuarial valuation valued the deficit of the scheme at £9.043 billion as of 31 December 2008.[84] Following a change in the regulations governing inflation index linking, the deficit was estimated at £5.2 billion in November 2010.[85]

Sponsorships

BT sponsored Scotland's domestic rugby union championship and cup competitions between 1999 and 2006.[86]

On 31 July 2012, it was announced that BT agreed a three-year sponsorship deal with Ulster Rugby and sees BT become the Official Communications Partner. BT's logo will appear on the Ulster Rugby shirt sleeve for all friendlies, Heineken Cup and RaboDirect Pro12 matches as well as a significant brand presence at their home ground; Ravenhill Stadium.[87]

On 29 July 2013, it was announced that BT had partnered up with Scottish Rugby Union in a four-year sponsorship deal with its two professional clubs; Edinburgh Rugby and Glasgow Warriors that will commence from August 2013. The deal involves BT Sport becoming the new shirt sponsor for both clubs as well as being promoted with BT Group at their respective home grounds; Scotstoun Stadium and Murrayfield Stadium.[88][89][90]

On 28 May 2014, it was announced that BT agreed a £20 million four-year sponsorship deal with Scottish Rugby Union which includes BT securing the naming rights for Murrayfield Stadium which becomes BT Murrayfield Stadium, become sponsor of the Scotland sevens team, become principal and exclusive sponsor of Scotland's domestic league and cup competitions from next season, taking over the role from The Royal Bank of Scotland Group (RBS), and become sponsor of Scottish Rugby's four new academies that aims to drive forward standards for young players who have aspirations to play professionally.[86][91][92]

On 14 April 2015, it was announced that as part of BT's current £20 million four-year sponsorship deal with Scottish Rugby Union that was announced in May 2014, BT has completed its sponsorship portfolio following an additional investment of £3.6 million for the 3 years remaining of its sponsorship deal, to become the new shirt sponsor for the Scotland national teams.[93]

On 27 January 2016, it was announced that BT, alongside YouTube will be the new joint headline sponsors in a three-year deal with Edinburgh International Television Festival. The two companies will "share prominence across all branding of the 41st TV Festival, including the famous MacTaggart Lecture and will work closely with the festival organisers in their bid to reflect new trends in a rapidly transforming industry, from new ways of distributing content to technical innovations such as Virtual Reality".[94]

BT is the founding and principal partner of the Wayne Rooney Foundation, which was established to improve the lives of children and young people. The Foundation will run events "to raise vital funds to support the work of key organisations dedicated to supporting disadvantaged and vulnerable children and young people". These organisations are four chosen charities which are, Manchester United Foundation, NSPCC, Claire House Children's Hospice and Alder Hey Children's Hospital. The first of these events was Wayne’s testimonial match in August 2016 between Manchester United F.C. and Everton F.C. which raised £1.2 million. The match was screened live through BT Sport with BT MyDonate being the official fundraising platform for the testimonial, with both online and text options for donations promoted during the match.[95][96][97][98]

On 26 May 2017, it was announced that BT is to sponsor the 2017 British Urban Film Festival (BUFF) and sees BT host every event of the film festival, including the Awards at the BT Tower. BT will also broadcast the awards ceremony on BT.com and will have the opportunity to screen films acquired from the festival on its BT TV store platform.[99][100][101][102][103]

On 6 September 2017, it was announced that BT had extended its current £20 million four-year sponsorship deal with Scottish Rugby Union that was announced in May 2014, for a further three years beginning from June 2018. The new deal sees BT retain the naming rights to BT Murrayfield Stadium, alongside its role as principal partner of the Scotland national team and Scotland 7s. BT's logo will continue to be displayed on the front of Scotland rugby shirts across the world, in the Six Nations Championship, as well as the summer and autumn test matches. BT will also continue to be promoted at Edinburgh Rugby and Scotstoun Stadium in Glasgow.[104][105][106][107]

Historical financial performance

BT's financial results have been as follows:[1]

2008–present

Year ending 31 March2008200920102011201220132014201520162017
Turnover (£m)20,70421,39020,91120,07619,30718,01718,28717,85118,90924,082
Profit/(loss) before tax (£m)1,976(134)1,0071,7172,4212,5012,8273,1723,4732,354
Net profit/(loss) (£m)1,738(81)1,0291,5042,0032,0912,0182,1352,5881,908
Basic eps (p)21.53.213.319.423.726.725.726.533.219.2

1992–2007

Year ending 31 March1992199319941995199619971998199920002001200220032004200520062007
Turnover (£m)13,33713,24213,67513,89314,44614,93515,64016,95318,71517,14118,44718,72718,51918,42919,51420,223
Profit/(loss) before tax (£m)3,0731,9722,7562,6623,0193,2033,2144,2952,942(1,031)1,4613,1571,9452,6932,6332,484
Net profit/(loss) (£m)2,0441,2201,7671,7311,9862,0771,7022,9832,055(1,875)1,0082,7021,4141,5391,6442,852
Basic eps (p)33.219.828.527.831.632.826.646.331.7(25.8)12.131.416.418.119.534.4

Environmental record

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 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.[108]

BT has made it clear that it has an ambitious plan to reduce carbon dioxide emissions.[109] Its strategy includes steps to reduce the company's carbon footprint as well as those of customers, suppliers and employees. BT has pledged to achieve an 80% reduction by the year 2016, which will require further efficiency improvements.[110]

Controversies

In 2001, BT discovered it owned a patent (U.S. Patent 4,873,662) 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. On 11 February 2002, BT began a court case relating to its claims in a US federal court against the Internet service provider Prodigy Communications Corporation. In the case British Telecommunications plc v. Prodigy, the United States District Court for the Southern District of New York ruled on 22 August 2002 that the BT patent was not applicable to web technology and granted Prodigy's request for summary judgment of non-infringement.[111]

Behavioural targeting

In early 2008 it was announced that BT had entered into a contract (along with Virgin Media and TalkTalk) with the spyware company Phorm (responsible under their 121Media guise for the Apropos rootkit)[112][113] to intercept and analyse their users' click-stream data and sell the anonymised aggregate information as part of Phorm's OIX advertising service.[114][115] 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).[116][117][118][119] 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 copyrighted 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 protocol, indicated his disapproval of the concept and is quoted as saying of his data and web history:

It's mine – you can't have it. If you want to use it for something, then you have to negotiate with me. I have to agree, I have to understand what I'm getting in return. I myself feel that it is very important that my ISP supplies internet to my house like the water company supplies water to my house. It supplies connectivity with no strings attached. My ISP doesn't control which websites I go to, it doesn't monitor which websites I go to.

— Sir Tim Berners-Lee, 2008[120]

Huawei infrastructure access

Beginning in 2010 the UK intelligence community investigated Huawei, the Chinese supplier of BT's new fibre infrastructure with increasing urgency after the USA, Canada and Australia prevented the company from operating in their countries.[121] Although BT had notified the UK government in 2003 of Huawei's interest in their £10bn network upgrade contract, they did not raise the security implications as BT failed to explain that the Chinese company would have unfettered access to critical infrastructure.[122] On 16 December 2012 the prime minister David Cameron was supplied with an in-depth report indicating that the intelligence services had very grave doubts regarding Huawei, and that UK governmental, military, and civilian privacy may have been under serious threat.[123]

On 7 June 2013, British lawmakers concluded that BT should not have allowed Huawei access to the UK's communications network without ministerial oversight, saying they were 'deeply shocked' that BT did not inform government that they were allowing Huawei and ZTE, both with ties to the Chinese military, unfettered access to critical national systems. Furthermore, ministers discovered that the agency with the responsibility to ensure Chinese equipment and code was threat-free was entirely staffed by Huawei employees. Subsequently, parliamentarians confirmed that in case of an attack on the UK there was nothing that could be done to stop Chinese infiltration.[124]

By 2016 Huawei had put measures in place to ensure the integrity of UK national security. Specifically their UK work is now overseen by a board that includes directors from GCHQ, the Cabinet Office and the Home Office.[125]

ZTE, another Chinese company that supplies extensive network equipment and subscriber hardware used with BT ‘Infinity’, was also under scrutiny by parliament's intelligence and security committee[126] after the US, Canada, Australia and the European Union declared the company a security risk.[127]

Alleged complicity with drone strikes in Yemen and Somalia

In September 2012, BT entered into a $23 million deal with the US military to provide a key communications cable connecting RAF Croughton, a US military base on UK soil, with Camp Lemonnier, a large US base in Djibouti.[128] Camp Lemonnier is used as a base for American drone attacks in Yemen and Somalia, and has been described by The Economist as "the most important base for drone operations outside the war zone of Afghanistan."[129]

Human rights groups including Reprieve and Amnesty International have criticised the use of armed drones outside declared war zones. Evidence produced by The Bureau of Investigative Journalism and Stanford University's International Human Rights & Conflict Resolution Clinic suggest that drone strikes have caused substantial civilian casualties, and may be illegal under international law.[130][131]

In 2013, BT was the subject of a complaint by Reprieve to the Department of Business, Innovation and Skills under the OECD Guidelines for Multinational Enterprises, following their refusal to explain whether or not their infrastructure was used to facilitate drone strikes.[132] The subsequent refusal of this complaint was appealed in May 2014, on the basis that the UK National Contact Point's decision did not follow the OECD Guidelines. The issue of bias was also raised, due to the appointment of Lord Ian Livingston as government minister for the department which was processing the complaint: Livingston had occupied a senior position at BT when the cable between RAF Croughton and Camp Lemonnier was originally built.[133]

See also

References

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Further reading

  • Baldwin, F.G.C. The History of the Telephone in the United Kingdom (1925)
  • Foreman-Peck, J. "The development and diffusion of telephone technology in Britain, 1900–1940," Transactions of the Newcomen Society, (1991–92). 63, pp165–180.
  • Foreman-Peck, J., & Millward, R. Public and private ownership of British industry 1820–1990 (1994).
  • Hazlewood, A. "The origins of the state telephone service in Britain" Oxford Economic Papers (1953). 5:13–25. in JSTOR
  • Holcombe, A. N. (1906). "The Telephone in Great Britain". Quarterly Journal of Economics. 21 (1): 96–135. doi:10.2307/1883751. JSTOR 1883751.
  • Johannessen, Neil. Ring up Britain: the Early Years of the Telephone in the United Kingdom (British Telecommunications plc, London, 1991)
  • Johnston, S. F. "The telephone in Scotland." in: K. Veitch, ed., Transport and Communications. Publications of the European Ethnological Research Centre; Scottish life and society: a compendium of Scottish ethnology (2009): pp. 716–727 online
  • Magill, Frank N. Great Events from History II: Business and Commerce Series, volume 1:1897-1923 (1994) pp 218–23; historiography
  • Meyer, Hugo Richard. Public Ownership and the Telephone in Great Britain: Restriction of the Industry by the State and the Municipalities (1907). online
  • Pitt, D.C. The telecommunications function in the British Post Office. A case study of bureaucratic adaption (Westmead: Saxon House, 1980).
  • Robertson, John Henry. The story of the telephone: A history of the telecommunications industry of Britain (1947)
  • Tucker, D. G. (1978). "The Early Development of the British Underground Trunk Telephone Network". Transactions of the Newcomen Society. 49: 57–74. doi:10.1179/tns.1977.005.
  • Wetton, Jenny (2007). "The Early History of Telephony in Manchester, 1877–1898". Transactions of the Newcomen Society. 77 (2): 245–260. doi:10.1179/175035207x204833.
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