British Telecom's Strategic Transformation

As a typical representative of the global traditional fixed-line operators, BT (hereinafter referred to as BT) has completed the repositioning of integrated information and communication service providers based on the network by establishing long-term customer relationships and implementing key measures such as business transformation, network transformation and organization transformation, and has become a model for the transformation of traditional fixed-line operators. BT is one of the leading telecom service providers in Europe. It was originally a full-service telecom operator. In 200 1 year, for the strategic consideration of reducing debt and optimizing financial structure, BT split the mobile communication department. BT's main business includes local fixed telephone, domestic long-distance telephone, international long-distance telephone, narrowband/broadband Internet access service, enterprise solutions, network bandwidth rental/resale, etc.

BT's business scope is mainly concentrated in the UK, and 965,438+0% of its revenue in fiscal year 2004 came from the UK. As an established traditional operator, the revenue of BT traditional fixed-line business accounted for about 86% in fiscal year 2002. Bt is facing severe challenges in the British market.

First of all, mobile phone shunting has a growing impact on BT. In 2000, the number of mobile phone users in Britain exceeded that of fixed telephone users. Due to the continuous growth of the penetration rate of 2G mobile services and the launch of 3G services in Britain, the development speed of mobile phones has been obviously higher than that of fixed phones in recent years, and the trend of accelerating the transfer of telephone traffic to mobile phones is very obvious.

Secondly, although BT still maintains an obvious competitive advantage in the fixed telecommunications market, there are hundreds of operators in Britain, large and small, most of which provide resale services, and dozens of them compete with BT through their own infrastructure, mainly some cable TV network operators and some local operators.

At the same time, BT is also facing the impact of new technologies and services, such as VoIP. Coupled with the increasing heterogeneous substitution and homogeneous competition, the market share of BT voice services is accelerating. Bt's traditional fixed-line business income also continued to show a large degree of negative growth. In fiscal years 2003 and 2004, BT's revenue from traditional fixed-line business decreased by about 6% compared with the previous fiscal year. The overall strategic goal of BT is to become a comprehensive information and communication service provider based on the network. BT's main strategic transformation idea is to win customer support by establishing long-term cooperative partnership with customers; Through a series of measures such as improving service quality, creative marketing, price innovation and reducing cost, the potential of traditional business can be tapped to the maximum extent; Improve profits by guiding customers to use new products and services, such as ICT services, broadband, mobile and management services. ); Support business development by implementing 2 1CN strategy.

In the process of strategic transformation, in order to support business development and network transformation, BT's internal organizational structure has also been adjusted in a timely manner, gradually evolving from product-oriented to customer-oriented. Therefore, the strategic transformation of BT can be summarized as follows: customer relationship is the premise, business transformation is the key, network transformation is the foundation, and organizational transformation is the guarantee. (1) The client.

BT is fully aware that customers are the ultimate source of corporate profits, so BT will continue to take improving customer satisfaction as one of the key measures. In order to improve service quality and customer satisfaction, BT has taken a series of measures, such as hiring professional companies to analyze customer opinions; Establish a unified CRM system to master accurate and real-time customer information; Provide an end-to-end customer tracking system to handle customer inquiries and maintenance online; Establish different sales departments for different users and adopt different strategies to grasp the big and not put the small; Free voice information service is introduced, and when users are busy and inconvenient to answer the phone, telephone information is automatically reserved for users.

A series of measures taken by BT to improve customer satisfaction have achieved remarkable results. The latest survey results in fiscal year 2004 show that in the past three fiscal years, customer dissatisfaction has decreased by about 25% every year.

(2) Commercial aspects

Business transformation is an important part of BT's strategic transformation to an integrated information and communication service provider. While maximizing the potential of traditional services, BT has made pioneering explorations in new services such as ICT services, broadband and mobile, and achieved good results initially. BT's latest fiscal year 2004 annual report shows that new business income (mainly including ICT, broadband, mobile and management services, etc.). ) increased by 32% compared with fiscal year 2003, and its proportion in total revenue increased from 65,438+04% in fiscal year 2002 to 24% in fiscal year 2004. The growth of new business income in fiscal year 2004 not only made up for the 6% decline of traditional business income, but also boosted the growth of the company's overall business income.

BT began to focus on broadband services in 2002. By strengthening the close cooperation with the upstream and downstream of the industrial chain, BT has established a distinctive broadband development model, from acquiring the European music website dotmusic to reaching a content cooperation agreement with Yahoo, to forming an alliance with Microsoft and Hewlett-Packard, and then to acquiring Infonet, the world's leading provider of manageable voice and data network services, which is mainly responsible for the network platform, and professional Internet companies provide value-added services, forming a strategic alliance and providing services to customers in the form of joint brands. In March, 2004, BT announced four innovative measures to change the way of using broadband in Britain: flexible bandwidth, BT rich media, BT communication software and BT remote management system. These measures extend BT's dominant position in broadband access to content, application and management services. At the end of 2004, BT also established the Broadband Entertainment and Education Department (BT Entertainment), whose main business is to develop, authorize and sell broadband content, including customized music, games, TV and movies. In addition, BT has also made great efforts to develop broadband through BT Openzone service, and enhanced its position in the public broadband wireless service Wi-Fi with wireless Internet access. Through the implementation of a series of measures, the market share of BT broadband has been continuously improved. By April, 2005, the number of BT broadband users exceeded 5 million, and the target was achieved 1 year ahead of schedule.

BT believes that the new ICT service is a promising new market. BT predicts that the product market of information and communication technology will be three to four times larger than that of traditional fixed-line and mobile phone services. In fiscal year 2004, BT ICT business revenue reached 2.753 billion pounds, up 65,438+08% year-on-year, of which the contract amount exceeded 7 billion pounds. The proportion of ICT in total business income increased from 9% in fiscal year 200/kloc-0 to 14.8% in fiscal year 2004.

In April 2003, BT reorganized its internal business structure and established BT Global Service Department, which is responsible for providing comprehensive information and communication services and complete solutions for large global commercial customers, including desktop computers and Internet equipment and software, data transmission and line connection, e-commerce solutions, business process outsourcing, network service management, system integration and information consulting services. In 2004, BT set up a working group named One IT, which is dedicated to building, designing, expanding and managing IT networks and communication systems for users. NHS, Unilever, British Ministry of Defence, Reuters, British pension institutions and local governments have become new users of One IT. In order to further meet the needs of users, BT will greatly increase the number of employees in the ICT project, and plans to increase the number of employees in the project from 700 to 4,000 in 2006.

Re-entering the mobile market and exploring the road of fixed-line and mobile convergence is another bold move for BT business transformation. In 2003, "BT Mobile Office" was launched for enterprise users BT, which provided GPRS wireless access service by renting the GSM/GPRS network of MMO2, and bundled with BT's original WLAN and fixed data access services to form an integrated data service access service for enterprise users. BT launched the "BT Mobile Home Plan" for individual users, providing mobile phone services to ordinary public users by renting T-mobile's GSM/GPRS network, providing users with unified fixed/mobile phone charges and free short-term calls to fixed telephones. At the beginning of 2004, BT and Vodafone signed a five-year cooperation agreement and became Vodafone's mobile virtual operation partner. In March, 2004, BT officially launched the Bluephone project, which provides indoor mobile phone service by using unregulated Bluetooth technology, so that users can seamlessly switch between fixed and mobile networks with only one device, and provide better communication services than fixed or mobile alone through guaranteed coverage and lower overall expenditure. In fiscal year 2004, BT's revenue in the mobile market reached 205 million pounds, up 65,438+007% year-on-year. As of March 3, 2005, there were more than 372,000 mobile enterprises and individual users in BT.

(3) network.

In order to support business transformation, BT published a white paper 2 1CN in early 2004. 2 1CN aims to comprehensively improve the customer experience and meet the needs of users for integrated information and communication services; Eliminate the overlap of existing multiple service networks and improve the speed of putting products and services on the market; Improve operation and maintenance efficiency and fundamentally reduce costs.

At the end of 2004, BT further determined the timetable for network upgrade. In 2006, a large number of users will switch from PSTN network to IP network, which is expected to be basically completed in 2008. In the next five years, 2 1CN will change the service and cost structure of BT, avoid the repeated construction of existing multi-service networks, and build a single IP network supporting multi-services. Bt will spend 2/3 of its annual expenditure on new media technologies such as 2 1CN, and this proportion will continue to rise. Although the amount is huge, the investment in the next generation network will enable BT to save money in the future. Bt plans to save 654.38 billion pounds in operating expenses every year by building NGN by 2008.

The main idea of the evolution of 2 1CN is: at the access and convergence level, access to services such as PSTN, VoIP, DSL and PON is mainly provided by using MSAN, so as to reduce the number of access devices, realize the integration of access levels, greatly reduce the access cost and improve the efficiency and automation; At the service edge, the number of service edge devices is reduced to110 by using MAN routers instead of traditional voice switches and data cross-connection devices. In the core network, the core network router is used to replace the original core network switch, and the next generation core network with security and QoS capability is constructed. The evolution technology strategy of BT 2 1CN is shown in figure 2.

(4) Organizational aspects

Organizational transformation is the guarantee of business transformation and network transformation. In the process of strategic transformation, BT's internal organizational structure has also been adjusted in a timely manner, gradually evolving from product-oriented to customer-oriented, forming an end-to-end organization that changes according to customer needs.

Before 2002, the market operation of BT was mainly business, which mainly consisted of five parts: BT wholesale, operating public telephone network; BT retail, using BT wholesale network to develop fixed telephone customers; BT Openworld, providing internet access and content services; BT Ignite, operating IP network; Concert, at & amp； T's joint venture company provides global services.

Since 2002, mainly in 2003, BT has adjusted its original business structure according to its customer base: among them, BT's overall identity as a telephone network operator remains unchanged; After the cooperation with at&T was terminated, the global business and IP network business were merged into a new BT global service company to provide services for multinational companies. Internet business is merged into BT retail business, which is subdivided into ordinary residential customers, small and medium-sized commercial customers, corporate customers and public sector customers to provide packaging solutions for different customers.

At the end of 2004, BT established a broadband entertainment and education department, which became an integral part of BT's retail consumption business. In the strategic transformation of traditional telecom operators, BT has become a model of innovation. BT has set a transition period of 10 years for the strategic transformation process. In the past two to three years, the process of transformation began to accelerate, and the transformation also brought the growth of enterprise value to BT. On the other hand, China telecom industry, in fact, the current market environment of domestic fixed-line operators is similar to that of British BT, and the key measures of BT transformation undoubtedly have important reference significance.

On the customer side, according to the "2004 National Complaints Summary" published by China Consumers Association, mobile phone complaints rank first in commodity complaints and telecom service complaints rank second in service complaints, which shows that domestic operators still have a long way to go to improve customer satisfaction. In terms of specific strategies, domestic fixed-line operators need to distinguish different market segments, determine different service levels according to user value, establish differentiated service systems, improve service means, establish perfect CRM and marketing analysis systems, and improve service levels, thus enhancing customer satisfaction.

In terms of broadband services, China Telecom and China Netcom, as the main Internet builders in China, have been operating content applications for a long time and have created some well-known or local brands in China. Unfortunately, their strength is relatively scattered, and they have not integrated the resources at the group level, so the development of content application services has not seen great improvement. With the decrease of ARPU value of user access, the phenomenon that the increment of broadband service development does not increase income is obvious. Therefore, on the basis of rapidly expanding the scale of broadband market users, the development of broadband services should improve the content service mode, change "push" content to "pull" content for users, create a good content publishing platform for more content providers, and extend the access advantage in broadband competition to content, application and management services. Broadband products should be as rich as possible, and low-value series products should be provided as much as possible to meet the needs of users at all levels.

In terms of ICT business development, domestic fixed-line operators have comparative advantages such as good reputation, brand awareness, strong network resources, rich customer resources, excellent talent team and strong attraction to various partners. At the same time, the growing demand of customers for "package" information and communication solutions also provides good opportunities for operators to carry out ICT services. Therefore, the development of ICT business should combine the actual situation of enterprises, innovate the service delivery mode, and actively cooperate with domestic and foreign industry system integrators, equipment vendors, software vendors, telecom operators with system integration experience and major customers in various industries to learn from each other and develop together. In terms of specific business, we can consider focusing on network services, IT outsourcing, system integration and other service areas with good growth and profitability and strong competitiveness. In the early stage of business development, we can first consider focusing on meeting our own IT business needs, then gradually meet the comprehensive needs of our corporate customers in communication and IT, and finally become an integrated information and communication service provider with the ability to provide integrated communication and IT solutions.

In terms of organization, organizational mechanism reform is an inevitable choice for state-owned telecom enterprises to support business transformation and network transformation. At present, it is also the trend of the reform and development of the world telecom industry to gradually evolve from network-centric and product-centric to customer-centric organizational structure. For domestic fixed-line operators, in the process of evolving to a customer-centered organizational structure, in order to make the enterprise smoothly transform, we can temporarily consider adopting the mode of "one enterprise, two systems", and for ICT services, Internet and other businesses, we can consider adopting a flexible and fast working mechanism, making appropriate venture capital, operating with certain capital means, and striving to cultivate its rapid growth, thus becoming a new business growth point for enterprises. Domestic fixed-line operators can consider setting up a special content-oriented operation department to uniformly operate application-layer services, and closely integrate with the corresponding fixed-line, broadband network, mobile network and other business network operation departments to provide customers with complete comprehensive information services.