British Telecom - Broadband• BT is one of the largest telecommunications services companies in the world• 170 countries and Its biggest market is BT has operations in more than UK with more than 21 million customers• Its product include telephony, broadband and subscription television services.• BT group is primarily divided in to following four companies BT Retail BT Wholesale BT Global Services Openreach• This paper aims to discuss superfast broadband in detail
Target Market (s)• BT Broadband has approx 5.83 million customers in UK (comprising North Ireland, Scotland, Wales, England)• Customers comprises both business and household users with age group of 15 – 70 yrs.• Broadband provided via fixed line only. Doesn’t comprise mobile broadband.• Broadband gaining popularity and primarily used for : education communication sport Music entertainment Information
Competition• 289 telecom operators are in UK including BT• 67 operators who provide broadband services• Top 6 have market share close to 94%• BT one of the largest in all parameters• Main Competitors are Virgin, BskyB, Talk Talk, Orange and O2. Based on Avg Broadband Speed (MB/s) Based on number of customers (millions)
PEST Analysis1. Highly Regulated Industry2. Strict Competition Act3. Government watchdog very active4. Technology pro government1. Developed Economy2. Buying Power high3. Telecom product prices are very regulated1. One of the developed economies2. People spend more time at home3. Take pride in knowing everything first4. Atleast one gadget per household1. Infrastructure state of the art2. Basic telephony already very old3. Pioneer of technology driven growth
Porter 5 forces of Industry H Potential Entrants Threat of New Entrants Bargaining H IndustryH power of Competitors H SuppliersSuppliers Buyers Bargaining Rivalry among power of existing firms Buyers Threat of Substitute products H Substitutes Industry Highly Unattractive
Strategic Maps (Price Vs Network Coverage) High Low Low High Strategic Maps (Price Vs Network Coverage)1. BT and Virgin telecom both have same market share & are the market leaders.2. Virgin is high in speed while BT is high in network coverage3. Hence Speed/Network coverage is not sole reason of larger market share
Strategic Maps (Speed Vs Price) HighSpeed Low Low High Price1. Virgin is high in both Price and Speed2. Both BT and Virgin have same market share3. Which means price/speed cannot be the sole reason of higher market share
Strategic Maps (Brand Image Vs Product Offering) High Brand Image Low Low Product Offerings High 1. Brand image for Virgin is same as that of BT 2. However BT has more products in broadband category than others 3. Both Virgin and BT have same market share 4. Brand image/product offerings is not sole reason for higher market share
Strategic Maps (Quality Vs Price) HighBroadband Quality Low Low High Price 1. Virgin scores high in broadband quality 2. However both BT and Virgin have same market share 3. Price/Broadband Quality is not the sole reason for higher market share CONCLUSION – NO SINGLE KSF FOR HIGHER MARKET SHARE
KSFs & Threshold Success Factors• KSFs Brand Image Network Coverage Price – Refers to appropriate pricing based on features Speed• Threshold Success Factors Broadband Quality Product Offerings
Competitive Matrix KSF Weightage BT Virgin Sky Talk Talk O2 Orange Network 35% 9 7 6 5 5 4 Coverage Price 20% 9 9 8 6 8 6 Speed 25% 7 9 7 5 5 4Brand Image 10% 9 9 7 4 5 5 Broadband 5% 7.5 9 8 7 7 7 Quality Product 5% 9 7 8 7 7 7 Offerings Score 100% 8.375 8.3 7.45 5.35 5.75 5.15Market Share 23% 22% 19% 10% 12% 8% Threshold Factors Price refers to appropriate pricing based on features 1. BT, Virgin and Sky are the main competitors 2. Broadband quality and product offering are threshold 3. BT scores high on network coverage while Virgin on speed
Triangle Model KSF Competencies• Brand Image • Infrastructure to• Network support all Coverage telecom features• Price • Reach to all• Speed parts of UK• Broadband • Variety of bundle Quality packages for• Product broadband Offerings Value Proposition BT connects both urban and rural consumers with uninterrupted superior broadband anytime anywhere at an affordable price.
Vision/Mission/Values Vision• To be dedicated to helping customers thrive in a Values changing world 1. Trustworthy: we do what we say we will 2. Helpful: we work as one team 3. Inspiring: we create Mission new possibilities• To be the leader in delivering 4. Straightforward: we converged networked services make things clear 5. Heart: we believe in what we do
Competencies (Ladder Model) Sustainable Com Advantage 1. Broadband anywhere 2. Fault Resolution Process Distinctive Com 3. Integrated tech services 1. Customer service 2. Hub-spot Strategic Com Network Competitive Advantage 1. Reach 1. Effective customer care 2. Bundled 2. Affordable prices packages Competencies Threshold Com 1. Operational 1. Superfast Efficiency Broadband 2. Technology know-how Peripheral Com Resources 1. Fixed line1. Infrastructure telephony2. Manpower3. IT Setup Incompetencies 1. Innovation
Long Term Objectives 1. Driving broadband-based consumer services (97% Market penetration by 2015) 2. Being the brand for business for UK SMEs 3. Ensuring BT Global Services is a global leader (No 1 or No 2 in EMEA by 2020 ) 4. Being the wholesaler of choice (No 1 in UK by revenue by 2015) 5. Being the best network provider (No 1 by customers by 2015) 6. Being a responsible and sustainable business leader 1. Improve long term “free cash flow “ (treble from now by 2020) 2. Reduce overall level of debt year on year (4% y-o-y till 2020) 3. Support pension scheme every year (Reduce pension deficit to zero by 2017) 4. Pay progressive dividends to shareholders.
New Triangle Model KSF Competencies • Infrastructure to support all telecom features • Reach to all parts • Network Coverage of UK • Price • Variety of bundle • Speed packages for • Fiber Network broadband • Customer Care • Excellent • Fault Resolution customer care • Quickest fault resolution Value Proposition BT connects consumers with superfastHighlighted text are the additions as per new broadband anytime anywhere at theKSFs / Competencies / cheapest price without hassles. Value proposition
New Competitive Matrix KSF Weightage BT Virgin Sky Talk Talk O2 Orange Network 20% 10 8 7 7 7 6 Coverage Price 10% 9 8 7 6 6 7 Speed 20% 9 9 7 5 5 4Fiber Network 20% 9 9 7 5 5 4Customer Care 15% 9 7 7 6 7 6 Quick Fault 15% 9 7 5 5 5 5 Resolution Score 100% 9.2 8.25 7 5.95 6.1 5.45 Market Share 35% 26% 15% 6% 7% 4% Estimated Price refers to appropriate New KSF New Weights Market Share pricing based on features 1. Network coverage, price and speed will have lesser importance 2. New KSFs for fiber network, customer care and quick fault resolution will take centre stage 3. New game and BT will leverage on its existing capabilities to be market leader
SWOT with Strategic Options Opportunities Threats 1. Untapped Market of superfast 1. Increasing use of mobile broadband broadband 2. Technology convergence - next 2. Innovation trends towards making big thing with internet at its core mobile phone more empowered 3. Globalization - more demand for 3. Too many competitors broadband 4. ARPU decreasing year on year 4. Cross cultural workforce uses VOIP based services 5. Innovation trends towards cheaper modes of communication 1. Network coverage in entire UK 1. Leverage the network for 1. Provide faster broadband than 2. The massive scale of BT’s hot corporate clients (S1, O4, O3) data package on mobile(S1, T1)Strength spot network 2. Innovate to lead the market 2. Connect wirelessly to mobile 3. Competitive pricing trends (S4, O5) devices across the city (S2, T1) 4. Telecom expertise for past 150 3. Provide broadband anytime(S5, 3. Price competitively (S3, T1) years O1) 4. Connect anytime anywhere (S1, 5. Manpower to support products 4. Connect customers anywhere at S5, T3) 6. Top leadership (Sir Michael Rake) affordable prices (S2, S3, O2) 5. Make bundle packages (S2 , T4) 1. Network based on copper 1. Continue process of laying fiber 1. Lay fiber based network (W1,Weakness 2. With existing infrastructure , for superfast broadband (W1, W2, T1) cannot reach high speeds W2, O1) 2. Leverage IT to thwart threats 3. Too much bureaucracy 2. Produce IT enabled product from competitors (W4, T3) 4. Heavy dependence on IT has packages for voip services (W4, 3. Innovate faster and different strangled them with changes O4) products to keep up with trends ( 5. Lack of Innovation at right pace 3. Use IT to reduce cost (W4, O5) W5, T2, T4)
Options Filter Strategic Long Term Value Organizational Mission / Total Options Objectives Proposition Capability Values Score 30% 30% 30% 10% Leverage the network for 9 7 7 9 7.8 corporate clients Innovate to lead 7 7 6 8 6.8the market trendsProvide broadband 9 9 7 7 8.2 anytimeConnect customers anywhere at 8 9 8 9 8.4 affordable prices
Short and Long Term Recommendation 1. Connect customers anywhere at affordable prices Use BT hotspot technology to connect gadgets, devices with superfast broadband. No competitor has infrastructure to emulate. 2. Provide broadband anytime Use BTs huge manpower and technology to provide broadband to customers 7 days a week. Make your customer care empowered to make this process hassle free. 1. Leverage the network for corporate clients Aligns with Long Term Objective of having BT Global Service as a leader. If BT is able to push broadband to corporate, they will have complete pie of corporate communication services. 2. Innovate to lead the market trends BT has sustained the market for past 150 years. With its technologies. With ever changing trends nowadays, it is even more important to innovate at incremental pace. For example – fiber based network for both voice and data.
Squacle Framework for Industry Broadband Transmission Innovation 1. Innovate at incremental Mobile Device Transmission pace 2. Innovate variants of Technology Turnover core productVoice Transmission 2. Upgrade capabilities to 1. Be ready for technology Affordable & Reach 2. Price reasonable for leverage new products change consumers to buy 1. Connect rural and urban consumer Telecom Industry 1. Think Global 2. Diversify 3. Keep up with trends globally Global Solutions Integrated Managed Services
Sources and References1. Broadband Explosion: Leading Thinkers on the Promise of a Truly Interactive World (Hardcover) ISBN: 1591396700 Harvard Business School Press2. http://www.guardian.co.uk/business/2011/jul/28/uk-broadband-market-share3. http://www.btplc.com/Careercentre/Aboutus/Ourculture/Ourculture.htm4. http://www.btplc.com/report/report06/ChiefExecutivesstatement/5. http://www.productsandservices.bt.com/consumerProducts/displayPnSHub.do?common_ selectedPrimaryNavIndex=26. http://www.btplc.com/Sharesandperformance/Annualreportandreview/Shareholdermagazi ne/Issues/May2011/strategicprioritiesMay11/index.htm7. http://www.telecomsmarketresearch.com/blog/?p=1158. Annabelle Dodd (Jul 2005)The Essential Guide to Telecommunications (Paperback) ISBN: 0131487256Prentice Hall9. Telewest communications plc: International Competitive Benchmarks and Financial Gap Analysis (Financial Performance Series) (Unbound) ISBN: 059718769X