Further to Gavin's statement ........... this was the response from OR CEO, Joe Garner.
Folks,
Today we’ve published our annual results and I would like to share my perspective on how we are progressing in Building Britain’s Connected Future. We have achieved some great things this year which I feel we can be proud of and I’d like to thank you for the part you have played. There are also some areas where we didn’t meet our targets and I’d like to ask for your support for this year.
Using the cornerstones of our Openreach plan on a page, I’d like to review our performance; customers, people, stakeholders and shareholders. This year, we have also added an extra cornerstone called 'network', highlighting the need to take greater care of our existing network and build more to meet the emerging needs of our customers.
Our customers – 'Trusted to deliver'
In 2014/15, we delivered record growth in fibre, record growth in copper and record growth in Ethernet. This is fantastic. Thank you and well done.
Our customers’ needs are changing, and we need to adapt to meet them as well as keep up with the growing demand for our services. This year we achieved our target on RFT which helped us deliver an improvement in customer satisfaction. This winter, for the first time in Openreach history, we were able to keep provision lead times short even when the repair workstack went up. Our investment in FVR (up 16% year on year) has helped to stop the fault rate rising, and we’ve also reduced missed appointments. We have managed to reduce the number of complaints too but there’s still some work to do to achieve our ambitious goals, and this year we are targeting a 50% reduction in complaints.
As ever, there are some key areas we need to improve on. We are still finding it a real challenge to keep up with demand on both Ethernet and New Sites. We’re working hard to improve our throughput on Ethernet and we are making improvements every day. In terms of New Sites, we’re increasing our investment by over £50 million this year which means we will have doubled our investment over the last two years. The company is making the investment, and now it is in our hands to deliver.
Our people – 'Inspired, engaged and valued'
Safety is always a key priority and we did a great job this year, reducing our lost time incidents (down 14% year on year) and road traffic incidents (down 4.7% year on year). Please keep safety front of mind.
We also recruited nearly 2,500 people into our organisation over the past year - the largest recruitment since the 1970s – and we plan to recruit a further 800 this year which is great. This has enabled us to reduce the number of contractors in Service Delivery by nearly 50%. We reorganised our business around our customers, creating a simpler, clearer, more accountable organisation with end to end delivery units focused around the needs of our customers. I believe that we are starting to feel the benefits of this already. We are also investing in better ways of working for our desk based people, and creating Centres of Excellence as part of Working Together.
Although CARE is improving year over year, I am disappointed that our CARE engagement scores have not moved forward in the last few months. We are leading significant change – in order to meet customers’ changing needs – and I hope that it is clear that we are changing for the right reason, I’m confident that our investment in Centres of Excellence, cutting edge tools, vans, buildings and continuous development will help over the coming year.
Our network – 'Nationwide, reliable and fast'
Network is a new cornerstone in our plan on a page because we need to react to the recent competitive threats. We know we need to take greater care of our existing network, and build more to meet the emerging needs of our customers. We have a rich pipeline of innovation to deliver such as G.Fast where we have committed to bring speeds of >500mb to most of the UK by 2020.
Meanwhile, our fabulous fibre rollout continues and we have now passed more than 22 million premises, over three-quarters of the UK. We are almost two years ahead of the timeline we originally announced.
Our stakeholders – 'Welcomed in the community'
Our fibre rollout is making a real difference to Britain and we should be proud of our achievements so far. It’s an exciting time with the General Election taking place today, but our focus is on delivering our commitments.
As you may know, Ofcom has announced a wide ranging review of the market, which will raise the question of separation. BT Group greatly values the contribution that Openreach makes to the Group, and passionately believes that the current set up works best for consumers and the market.
Our shareholders – 'Competitive and investable'
We did face significant headwinds in the year, as regulatory price reductions reduced our income by approximately £180m. Without regulation, revenue would have been up around 3% in the year. However, we were able to offset much of the £180m decline through growth in our products – most notably Fibre and Ethernet. All year we have been experiencing the drag of Heavy Cable Recovery running down. While we were able to offset most of this, we were not able to get to our target at the profit (EBITDA) level. However, by focusing on efficiencies right across the business, we managed to stay flat year on year at the bottom line level. We did overspend our CAPEX budget significantly as we have been investing in the business. Net, it is a mixed picture on the financials. However, perhaps the most important and exciting element is that we believe that in 2015/16 we can get Openreach growing again. In particular, we are targeting revenue growth as we drive both NGA and Ethernet in particular. This would be the first time in Openreach history that we grow, and a very exciting prospect indeed. If we can get our revenues growing, and deliver our efficiencies, it will enable us to invest even more in the business. This is my ambition, and I very much hope one that you share.
Thank you for your contribution this past year, we have made significant progress in the way we are improving service for our customers in many areas of Openreach. With the right focus on Ethernet and New Sites I am confident this year will see us build on the momentum we have created and achieve even greater results as we continue to Build Britain’s Connected Future together.
Thank you
Joe
