COMPANY PROFILE -British Telecom
Business Sector :Telecommunications
Operating Geography :Europe, United Kingdom, Global
About British Telecom :British Telecom Group (BT) is a multinational telecommunications services company dealing in TV, fibre, fixed and mobile primarily in UK and across 180 countries globally. The company was established in 1969 and is headquartered in London, UK and has around 102,000 employees as of 2016. It was born out of the General Post Office in 1981 when it became independent and became known as British Telecommunications trading as British Telecom. It was privatized in 1984, with approximately 50% of its shares sold to public. The government sold its remaining stake further in 1991 and 1993. BT features on both the London Stock Exchange and New York Stock Exchange and is also a part of Footsie. Both subsidiaries, 'BT Global Services' which oversees telecom services to corporate and government bodies globally and 'BT Consumer' which supplies telephone, broadband and subscription services across United Kingdom are controlled by British Telecom. BT's businesses are sternly regulated by Britain's telecom regulator Ofcom. BT is gradually diversifying into information technology and digital products which are more profitable and has lesser regulation.
British Telecom's USP (unique selling proposition) lies in its being a legacy, one of the world's oldest telecom company with a global presence. BT group's mission statement reads "Our mission revolves around a total dedication to the quality of service and experience our customers receive from us: BT Retail is a customer-centric distribution business that will grow shareholder value and deliver an excellent, continuously improving, customer experience."
British Telecom Revenue :
£24,062 million – FY ending March 2017 (y-o-y growth 27.5%)
£18,879 million – FY ending 31st March 2016
Ownership / Major shareholders :The major shareholders of BT as of 31 March 2017 include: BlackRock with 5.50% of total voting rights, T-Mobile Holdings Limited with 12% of total voting rights and Orange SA and Orange Telecommunications Group Limited representing 4% of total voting rights.
Competitive Analysis of British Telecom
The SWOT analysis report of British Telecom presents the internal analysis and external analysis of the Company with insightful details of the current market position and future growth strategy of UK's most popular telecom player. The SWOT analysis essays the detailed business case of British Telecom with insights into its strengths, weaknesses, opportunities and threats.
BT has experienced considerable headwinds in the UK public sector and international corporate markets. Openreach, BT's subsidiary was also penalized by Ofcom after an investigation revealed loopholes in expected quality standards. But at the same time BT has performed well on integrating EE, the mobile company it acquired in 2016, improving customer experience and achieving great headway with BT Sports. Its competitive advantage lays in its well established brand which consumers can easily connect to and diversified offerings which are keeping pace with advanced technology. Although BT share price has remained flat, the telecom giant has illustrated sound ability in facing the current headwinds and with a planned business strategy, BT is well on its way to become UK's digital champion
|1. Healthy balance sheet with strong financials and cash flow from operations |
2. Strong base in UK with large number of customers
3. Wide spectrum of product and service offerings
4. Delivering strong customer experience through great product and services
|1. Largely dependent on UK markets with limited presence in the high growth Asia Pacific Region
2. Separation of Openreach from BT will result in loss of branding and increase in costs
3. Large pension deficit and accounting scandal in Italian business to hurt finances
|1. Development of 5G through strategic partnerships with Nokia and Huawei|
2. Exclusive broadcasting rights to European football to help BT further expand its customer base
3. Launch of new products and services capitalising on synergy from EE acquisition
|1. Intense competition and decrease in profits due to cheaper competitor offerings
2. Impact of Brexit and the subsequent devaluation of the British pound to hurt profitability
3. Pressure of government regulations and licenses
USD 10.53 Great quality, Affordable pricing.
Detailed SWOT Analysis of British Telecom
1. Healthy balance sheet with strong financials and cash flow from operations: : British Telecom has a healthy balance sheet with strong financials. Its FY16 revenues stood at £19,042 million; up 5.9% from £17,979 in FY15. Its FY16 operating profit stood at £ 2588 million up 21.21% from £2135 million in FY15. It has a net asset base of £31,576 million as on 31st March 2016. BT also had strong cash flows of £18,909 million in FY 2016 from external customers, which is a 5.9% increase over the previous year. Given situations where many companies don’t have the cash to meet their day to day obligations, BT's business model ensures there is a strong cash flow which is indicative of the Company's ability to adequately meet its working capital obligations.
2. Strong base in UK with large number of customers: BT Group is the largest provider of consumer broadband and fixed voice telephony in the UK. They acquired the mobile operator EE in January 2016. This has landed BT 35% of the mobile consumer market share and a similar share of the UK's consumer broadband business. This has put them in a better position to meet the demands of UK’s customers. More than 560 communication providers use their network. BT's operations are spread across 3 target markets, business, consumer, and infrastructure. The consumer market, consisting of households, is catered to by providing fixed-line broadband and telephony services; the business market consists of 5.4 million businesses in the UK, and the infrastructure market includes firms building network infrastructure, data centers and mobile cell sites, where Ethernet connections and specialized services are the main areas of demand.
3. Wide spectrum of product and service offerings: BT has 6 customer facing business portfolios, Consumer, EE, Business and Public Sector, Global Services, Wholesale and Ventures, and Openreach, which will now be an independent unit but will be 100% owned by BT. They are the biggest provider of fixed line telephony and broadband services in the UK. They are also the second largest provider of Pay-TV sports channels and a leader in broadcasting technology. BT Broadband has approx. 5.83 million customers in UK (comprising North Ireland, Scotland, Wales, and England). BT's offerings range from Broadband, TV, Sports, fixed –lines, mobile and bundles. BT is one of the leading networked IT service provider to global and domestic multinationals in India.
4. Delivering strong customer experience through great product and services: British Telecom has consistently emphasized on its strategy to improve and deliver every aspect of its customer experience. Initiatives undertaken by BT to improve customer service include weather proofing of its networks and registered a halt in the growth in network faults in FY16 after six consecutive years of increase. Global Services division has also helped in better monitoring of networks and IT applications. FY16 also saw BT launching BT Call Protect services free to all customers which would help to divert spam and nuisance calls to junk voicemail. The Consumer division upgraded its superfast broadband service from 38Mbps to 52Mbps to all customers where available. BT has also improved its “Right First Time” performance by 6.4% in FY16 compared to -3.0% in FY15 and has registered a cumulative improvement of 22.1% since 2010.
This section is available only in the Complete report on purchase.
1. Development of 5G through strategic partnerships with Nokia and Huawei: British Telecom is collaborating with Nokia on the development of 5G. As a first step in the collaboration, Nokia has started conducting trials of its latest 5G ready radio equipment. BT also has entered into an research alliance with Huawei into ‘network splicing’ over 5G networks which will allow individual networks remain unaffected due to surge in bandwidths on network as a whole. Given that 5G will be able to deliver seamless connectivity better than any of today’s networks, including 4G, this is a huge opportunity.
2. Exclusive broadcasting rights to European football to help BT further expand its customer base: BT retaining the exclusive rights to European football for £1.18bn till 2021 will help it in developing its share of the retail triple-play and quad-play market segments. The deal will further help in bolstering BT’s Pay-TV business as it continues to fend off competition from Sky TV and Virgin Media, other major competitors in the UK’s DTH market.
3. Launch of new products and services capitalizing on synergy from EE acquisition: The previous year BT launched their new European football content. The launch of BT Mobile was also successful, adding 400,000 customers in just a year since its launch. The acquisition of EE in January allowed them to merge a large mobile network with a large broadband network. Apart from this, a number of cloud-based services and security products were launched for their business customers.
This section is available only in the Complete report on purchase.
Major Competitors :1.Vodafone 2. Sky 3. TalkTalk 4. Deutsche Telekom
Major Brands :BT Mobile, BT Sport, EE
Key Business Segments / Diversification :
Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :
|Name||Business Segment||Year||Type||Objective/Synergy Achieved|
|EE||Mobile Network Operations||2015||Acquisition||Acquisition of 30 million customers, revenue, costs and capital expenditure synergies|
|Wire One Communications||Videoconferencing support expertise||2008||Acquisition||Strengthening and enhancement of BT conferencing unit as video business unit|
|Ufindus||Online business directory||2008||Acquisition||Enhanced its position in local information market in UK|
USD 10.53 Great quality, Affordable pricing.
Check out analysis of other relevant companies
WHY BUY THIS REPORT?
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
- Gain competitive intelligence about British Telecom's business
- Key competitive advantages the Company enjoys in the UK market
- Evaluation of market growth and industry performance
- Bargaining power of the Company in the telecom ecosystem
- Key success factors driving growth
- Gain a good understanding of British telecom's internal analysis which include strengths and weaknesses.
- Identify opportunities for growth
- Identify potential threats which hinder growth prospects and performance
- Benchmark British Telecom's performance against the telecommunication industry average
- Gain and understanding of the micro and macro environmental factors.
- Track key industry trends of the telecommunication industry at large and how these specific political, economic, social, technological, legal and environmental factors impact BT
- Get knowledge about the major acquisition and mergers and how they have profited the British Telecom brand
- An understanding about the Company's ownership, its major shareholders
- Gain insight into British Telecom's business horizons, product diversification, market segmentation
- Major competitors and the threat they pose.
References used in British Telecom Analysis Report
1) BT Annual Report 2016: http://www.btplc.com/Sharesandperformance/Annualreportandreview/pdf/2016_BT_Annual_Report_smart.pdf
2) BT Investor Presentations: http://www.btplc.com/Sharesandperformance/Presentations/index.htm
3) What is Openreach and why is it being spun out from BT?: http://www.telegraph.co.uk/business/2016/11/30/bt-openreach-making-news/
4) BT risks losing '£1.25bn' to cheaper competitors, says UBS: http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/12154651/BT-risks-losing-1.25bn-a-year-to-cheaper-competitors-says-UBS.html
5) BT Sport sees off Sky with £1.2bn deal for Champions League football rights: http://www.telegraph.co.uk/business/2017/03/06/bt-sees-sky-12bn-deal-champions-league-football-rights/
6) BT and Huawei announce research into 5G network slicing: http://home.bt.com/tech-gadgets/future-tech/bt-and-huawei-research-5g-network-slicing-11364158147163
7) BT shares hit as Brexit renews fears over £10.6bn pension black hole: http://www.telegraph.co.uk/business/2016/06/28/bt-shares-hit-as-brexit-renews-fears-over-106bn-pension-black-ho/
8) Almost £8bn wiped off BT's value on Italian accounting scandal; pound skids below $1.25 on Brexit ruling: http://www.telegraph.co.uk/business/2017/01/24/ftse-100-rises-pound-nears-six-week-high-traders-bet-government/
Copyrights and DisclaimerBritish Telecom SWOT analysis has been conducted by Aditi Chaturvedi and reviewed by senior analysts from Barakaat Consulting.
Copyright of British Telecom SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions page for usage guidelines.