Achieving Broadband Britain- a Partnership model for enabling a Digital Networked Economy

Trish JonesGM Regional Broadband Partnerships

OECD Workshop 25th October 2004

Agenda

• Coverage and reach:where we are, where we are going

• Addressing the challenge - BT’s contribution to Regional Partnerships and Route map model

• Beyond the footprint to stimulate demand and create a digital networked economy

• BT working in partnership with regional and local key players to release the power of Broadband

Broadband at the Heart of BT

• 94% UK coverage – 3584 exchanges enabled

• 1644 from pre-registration scheme launched in July 2002

• advanced 1m footprint through Partnerships

• 99.6 % by July 2005 - commitment given by BT in June 2004

– 1447 exchanges in systematic build

– 565 exchanges without a trigger

• Take-up 13.6% with 3.7m connections and growing - with regional variation from 9.2% in NE to 19.1% London

Since September - extended reach to remove the distance limits

• Trials in Milton Keynes, Dingwall and Fort William delivering ADSL services beyond the previous 60dB (6km) limit

• Distance limit for its 512kb/sec ADSL broadband services now removed.

• Increased range for 1Mb premium services

• More than 1million additional homes and businesses now able to get ADSL service.

• Raising the average percentage of households on an enabled exchange that can get broadband from approx 96% to 99.8%.

• By July 2005, as many people will be able to get ADSL broadband services as can currently get good analogue TV reception for ITV1, Channel 4, BBC1 and BBC2

Insufficient demand to enable

every exchange

“Trigger Levels”breaking the vicious circle

Need to enable exchange

to generate demand

Community Engagement- Making it happen faster

• April 2000 our first 400 exchanges - 26%

•Move from push to pull

•Demand led approach to supply - launch of pioneering “Actnow” partnership in rural Cornwall

• Coverage was only 66% when BB registration scheme was launched in July 2002

•Registration campaigns - 470,000

•Worked actively with over 600 campaign groups

•“Get on and get it”; Campaign in a box launched 16th June 2003

•Nov 2003 - 80% , May 2004 - 90%•June 2004 - announced systematic build

Cornwall Launch April 2002 - our pioneer for a demand led approach

Originally 1 exchange, no trigger levels and low demand

Formal intervention to raise competitiveness of Businesses : partnership structure, management and formal project approach needed. EU Regional aid contributions supported capital investment, advisory services and Small Business adoption

actnow in Cornwall: enabled 12 exchanges 1100 new ADSL lines in first 12 weeks

29% of SMEs have taken up broadband

- 4500 SME sign ups, 5100 lines

Businesses now moving to Cornwall due to Broadband service availability

32K ADSL connections 16.5% take-up

Extended by 7 more exchanges without capital intervention and fast tracked another 15

eCommerceSkills DevelopmentExperience centre & portalBusiness SupportAwareness & marketingAccess/HardwareTechnology

Actnow Results - economic benefits

• Employment: 25% of those see economic benefits- had increased staff numbers since getting Broadband

• Turnover: 36% actnow sample v 35% others -had increased turnover in the last year. – Average increase for sample 34% v 14% for others

• Productivity: 48% actnow sample & 32% others had increased productivity.– Half as many sampled businesses had increased their productivity in shorter time

period of 7/8 months against 12

• Average GVA for actnow sample was £249,000 v £148,000

• Broadband contribution - grossed across Cornish businesses equates to circa £7m

• Profitability: 40% actnow increased since connecting to BB v 33% others. But…28% increase v 15% others

Route map - the need for a partnership approach

To maximise broadband coverage and create demandIncreasing take-up in areas where it is lowCreate demand in areas where not yet available

Incr

easi

ng c

ompl

exity

Reduced market demand

Increased cost of provision

Actnow,H&I

Wiltshire, West Sussex, Merseyside

NE & NICaerphilly,South

Yorkshire,Leicestershire

Partnership models

Localised marketing

User incentive

Localised support

Partial supply side

Supply side model

1 2 3 4 5£1 £70 £90 £110 £150+Average cost of

interventionper household

Partnership activity:

Connected cities

e.g. Leeds, Newcastle

The Value of Partnerships

– Since November 2002 BT has established 56 areas of public private technology neutral partnerships

Partnerships to continue to:

– finish the job for 100% community engagement

– create growth and demand for on-line services

– nurture usage for social & economic benefit

….our job has onlyjust begun

Wiltshire

YorksSouthbank

W. Yorks

S. Yorks

N. Yorks

Highlands (2)Scottish

Islands

Cornwall (2)

Devon

Kent

Merseyside

Brentwood

Lowlands (16)

Leicester

East Sussex and Hastings

South Wales (3)

Shropshire

One North East

Caerphilly (2)

Wrexham

Gwynedd

Cheshire

Manchester , Burnley

Hampshire West Sussex

Derbyshire

West Mids REDI

Beyond ADSL - Developments in July 04

Extended Reach

• Extend 512kbps Reach to 99.8% within an enabled exchange

• Extend 1MB Reach to 97%

• 2MB Reach remains at 82%

Satellite & Exchange activate

• Infill at the extremes and for small exchanges where triggers have not been set

BT Openzone & Internet kiosks

SDSL roll-out to over 150 exchanges

Radio Opportunity – Infill market significantly reduced for 512kb and 1Mb asymmetric

– Opportunity - higher speeds & 2 mg symetric beyond current SDSL coverage & to all exchanges incl business parks & rural

- Commercially viable without funding

- Demand based roll-out

- Announcements in November

Broadband transforming the way we live

Broadband Britain - a BT perspective• Significant societal and economic benefit will flow from

widespread coverage and adoption of Broadband in the UK

• Technology evolution is inevitable

• Broadband facilitates multiple connections, applications and services to be consumed simultaneously:

People | people

People | device

Device | device

The changing landscape

• The 21st Century is a World with Broadband Everywhere

• Customers want more choice, flexibility and control

• Convergence is gaining momentum and needs an underlying infrastructure to deliver and support it

• 21CN is a radical transformation for BT - supporting new converged services

• Simplicity is key

21CN - A single, fully integratedmulti-service network supporting multiple converged services(voice, data, video)

2004

2005

2006

2007

2008

Broadband available to 99.6%Strategic vendors announcedBroadband growth on MSAN/combo cardsFirst new service launches based on re-usable capabilities

Mass PSTN migration begins17 new product launches/enhancements based on re-usable capabilitiesNew operations & service management capability in place

Broadband dialtoneavailable tomost customers

Large scale non PSTN service migration begins

2009

Mass PSTN migration reaches more than 50% of customers

PSTN transformation trialDeep fibre trialConverged networkService creationExperience development centre

key milestones

Success is beyond networks and coverage and lies in people making maximum use of new services

• Marketing investment to stimulate demand – local and multi-channel

• Improve broadband services providing business solutions

• Getting citizens to use services to accessgovernment and local government services

• Education to improve skills

Local stakeholders to work together to nurturethe development of new services and benefitsenjoyed

What we have learnt about SMEs from working in partnership

Small business are increasingly net savvy and want;( Actnow data)

• Fast response to their enquiry

• Easy access 24/7

• Supplier with knowledgeand ICT savvy

• Good fulfilment and support

• Competitive pricing

• Local delivery

An innovative first for small business

‘BT Broadband Office Complete featuring Microsoft technology

Hosted Exchange

All the benefits of Microsoft Exchange Server 2003

including personalised email, calendar, contacts and

folders Available from your PC or

via your mobile. A managed service

Subscription Office

Microsoft Office Small Business Edition

inc. Microsoft Word, Excel, PowerPoint, Publisher and

BusinessContact Manager

Upgrades to latest releasesEasy monthly payment terms

Additional licenses as required

BroadbandProducts& Services

AccessSupportSecurity

Web Hosting

Sales & Support

Local partnershipresellers

One point of contact, One bill

BT is shaping the BB sector for consumer citizens too

•BT Rich Media is a joint venture between BT Retail and BT Wholesale.

• BTRM have been formed to help content owners exploit their assets, by ingesting them from any source, encoding,

editing and distributing to any device.

• BTRM also provide billing and subscriber management services where required by the content owner.

BT Rich Media

Scaleable, powerful and flexibleWe can take content of any kind, in any form, and distribute it rapidly and securely to any audience on any device in any country…

Our platform is placed at the heartof the new opportunity, uniting….

Communities through:• Providing creative and technical training

• Shared experiences

• Video (TV, VoD, self generated) / Audio (radio)

• Internal and external inputs

• Securely (password / pay-mechanics)

• Neighbourhood watch for:

• Policing (web cam security offering )

• Facilitating control and involvement for citizens in all aspects of their environment (social, health, sports etc.)

Working in Partnership to releasethe power of Broadband

• The last 0.4%– Champion policy on the last 565 exchanges

• Champion take-up with business and citizens– 3.7m to 5m during 2006

• Create a true digital networked economy– Set “output” improvement targets on BB driver projects

– Develop BB driven applications & content (local);

• Industry sectors, Education & on-line learning, Health & tele-medicine,

– Rural economic growth, tele-working, social & community networking, access to public services and training.

Creating a connected Region

Content and service providers win•Better business opportunities•Helps smaller content providers reach a broader customer base

All telecom companies win•Advertising helps everyone•Demand led & visible•Creates Competitive retail and wholesale markets•Conducive to encourage more investment

Local stakeholders winSustainable

investmentNew services

Increased profile for Region/Nation

Partnership body for other activity

Innovation

Community wins•Access to latest technology•Fast, constant, quality service•Tailored services•Market growth for local companies •Community ICT literate

UK Plc and Region Wins

• Innovative supply & demand growth models

• EU best practice and positioning

Stimulate and nurture demand