To: Branches with Members in BT

 Dear Colleague,

Openreach

OFCOM announced today that it had formally accepted BT’s undertakings to establish a new regulatory settlement. The key part of the settlement will be the launch of Openreach (commonly referred to currently as Access Services) in January.  As previously announced, it will be led by Steve Robertson with some 30,000 people working within it.  The workforce will be overwhelmingly engineering with a field force of some 25,000.  Openreach, although part of the BT Group, will have its own logo and all of the 22,000 vehicles are to be resprayed. The new business will be the second largest within the BT Group in terms of employees.  It will have assets of around £8 billion and revenues of more than £4 billion. The CWU has previously welcomed the proposed settlement as it falls broadly in line with our submission to the Regulator.  It is gratifying that the final settlement has been made removing much uncertainty amongst members.  It will remove, hopefully for ever, the big business calls for the break up of BT.  In terms of the Union’s negotiating agenda, the prime aspects will be resourcing and the culture of the new organisation.  We have already discussed and received proposals for the consultative structure below national level.  This will be based on 10 Territories.  Details of this will be reported separately.

I attach, for your information, a copy of the relevant BT press releases.

Yours sincerely,

Ian Cuthbert

Assistant Secretary

DC05 - XXX                                                        September 22, 2005

BT WELCOMES NEW ERA OF REGULATION

BT welcomed the landmark regulatory settlement announced by Ofcom today, describing it as a “defining moment” for the industry. The company predicted it would usher in a new era of investment and innovation.

          The settlement is based on the principal of focusing regulation only where it is needed, and rolling it back elsewhere. It will deliver clarity and certainty to the whole telecommunications industry. The settlement represents the biggest regulatory change since BT was privatised more than twenty years ago.

          As part of the settlement, BT has agreed to create a new business called Openreach (see accompanying news release DC05 – XXX). This business, which will be up and running by January 2006, will ensure all service providers have transparent and equal access to the nationwide local BT network. This network covers the “first mile” of wire that connects homes and businesses to BT exchanges across the UK.

          BT chairman Sir Christopher Bland welcomed the settlement saying:

“This settlement is an important achievement for the whole communications industry. It will benefit consumers, businesses and the UK economy. Ofcom have shown real vision, and BT looks forward to competing in this new regulatory environment

          BT chief executive Ben Verwaayen added: “This settlement is a defining moment for the industry and BT is totally committed to it. This offers a fresh start and means that companies will be able to focus entirely on their customers without being distracted by micro-regulation. It provides everyone with greater certainty and clarity. That, in turn, will release investment and innovation from which everyone will benefit.”

Inquiries about this news release should be made to the BT Group Newsroom on its 24-hour number: 020 7356 5369. From outside the UK dial + 44 20 7356 5369. All news releases can be accessed at our web site: http://www.bt.com/newscentre

About BT

BT is one of the world’s leading providers of communications solutions serving customers in Europe, the Americas and Asia Pacific.  Its principal activities include networked IT services, local, national and international telecommunications services, and higher-value broadband and internet products and services.

BT consists principally of three lines of business:

• BT Retail, providing a comprehensive range of communications and related services to more than 20m UK consumers and businesses.
• BT Wholesale, providing network services and solutions within the UK to more than 600 fixed and mobile operators and service providers including the provision of broadband and private circuits.
• BT Global Services, providing networked IT services to meet the needs of multi-site organisations globally.  BT Global Services operates in more than 130 countries and also offers international carrier services.

In the year ended 31 March 2005, BT Group’s turnover was £18,623 million with profit before goodwill amortisation, exceptional items and taxation of £2,085 million.
 

DC05 - XXX                                                        September 22, 2005

BT UNVEILS NEW MULTI-BILLION POUND BUSINESS

BT today unveiled Openreach, a new multi-billion pound business that will be responsible for the nationwide local BT network.

          Openreach is set to become a familiar household name as it will contain BT’s field force of 25,000 engineers. These engineers make more than 3.5 million home visits every year on behalf of hundreds of companies. They are the men and women who install new lines, upgrade the local network and maintain the green cabinets at the side of the road. In short, they are the people who ensure that tens of millions of people across the UK have reliable local access to telephony and internet services.

          The business, as well as having a new name, will also have a dramatic new look. Its 22,000 vans are to be re-sprayed to distinguish them from the rest of the BT fleet. They will be instantly recognisable by the bright multi-coloured waves that stretch the length of each vehicle.

          Openreach is being created as a result of the new regulatory settlement (see release DC05-XXX). It will be operational from January 2006 ensuring all service providers have transparent and equal access to the local BT network. This network covers the “first mile” of wires that connects BT exchanges to homes and businesses across the UK.

          It will be led by chief executive Steve Robertson, whose appointment was confirmed today. Whilst remaining an important part of BT, it will have its own headquarters, distinct identity and around 30,000 staff. These staff will come primarily from BT Wholesale and BT Retail.

The business will be the second largest within BT Group by number of employees and will have assets of around £8 billion and revenues of more than £4 billion. This makes it comparable in size to some FTSE 100 companies.

           Openreach will have its performance monitored by the newly created Equality of Access Board (EAB).  This Board will monitor the delivery of the undertakings given by BT to OFCOM and so will also monitor the performance of BT Wholesale in certain areas. Carl Symon, one of BT’s non-executive directors, will chair the Board which will have a majority of independent external members.

          Openreach chief executive Steve Robertson said: “The local BT network is one of the UK’s most important assets and my role is to ensure everyone has equal access to it. My team will be responsible for ensuring tens of millions of homes and businesses have access to the wider world and to faster and more exciting services in the future. Now we have a green light we can get down to delivering a business that everyone can be proud of. There’s a huge amount to be done by January but, given the progress we’ve already made, I am sure we will be ready.”

          The structure of BT Northern Ireland will not be affected.

Notes to Editors

The Openreach identity was created by leading brand and digital agency Rufus Leonard, who were recently responsible for the BT Connected World rebrand.  The Openreach identity will be rolled out across all elements of the new business following the launch in January, from livery and signage to uniforms and corporate and marketing communications.

Steve Robertson

Steve joined BT Wholesale in October 2002 as Managing Director Wholesale Operations from COLT Telecommunications. At COLT Steve was responsible for the design, deployment and operation of their pan-European infrastructure as well as product management and sales for COLT’s pan-European business as their Managing Director. Before joining COLT, Steve held a number of positions across BT including Director of Data Products and Senior Vice President Network, Systems and Operations for Concert. 

Openreach Facts

·         Openreach’s copper access network is 120 million kilometres long and so could stretch around the globe 3,000 times

·         This network covers 30 million customer lines from c.6,000 local exchanges

·         300 million telephone calls are made across this network every day

·         350 million internet connections are made across this network every day

·         Openreach will employ around 30,000 people, 25,000 of whom are engineers

·         These engineers collectively climb the equivalent of Mount Everest every single day while carrying out maintenance on telegraph poles

·         They work down 200,000 manholes and up more than 2.5 million poles

·         They visit 11,000 homes and offices every day. That’s 3.6m visits a year to help install new lines, make repairs, upgrade service etc

·         Openreach will have a fleet of more than 22,000 vans

·         These vans cover 70,000 miles every single day

·         This means Openreach engineers collectively travel almost three times around the circumference of the globe every single day

Inquiries about this news release should be made to the BT Group Newsroom on its 24-hour number: 020 7356 5369. From outside the UK dial + 44 20 7356 5369. All news releases can be accessed at our web site: http://www.bt.com/newscentre

About BT

BT is one of the world’s leading providers of communications solutions serving customers in Europe, the Americas and Asia Pacific.  Its principal activities include networked IT services, local, national and international telecommunications services, and higher-value broadband and internet products and services.

BT consists principally of three lines of business:

·          BT Retail, providing a comprehensive range of communications and related services to more than 20m UK consumers and businesses.

·          BT Wholesale, providing network services and solutions within the UK to more than 600 fixed and mobile operators and service providers including the provision of broadband and private circuits.

·          BT Global Services, providing networked IT services to meet the needs of multi-site organisations globally.  BT Global Services operates in more than 130 countries and also offers international carrier services.

In the year ended 31 March 2005, BT Group’s turnover was £18,623 million with profit before goodwill amortisation, exceptional items and taxation of £2,085 million.

BT Group plc is listed on stock exchanges in London and New York. British Telecommunications plc (BT) is a wholly-owned subsidiary of BT Group and encompasses virtually all businesses and assets of the BT Group.

For more information, visit www.bt.com/aboutbt

Today OFCOM announced its formal acceptance of BT’s undertakings to establish a new settlement for the UK telecoms industry that will sweep away the micro-regulation of the past.

It is the biggest change since BT was privatised more than twenty years ago, with the UK set to become the first country in Europe with a de-regulatory agenda.  Regulation will be focused where it is needed, and rolled back elsewhere.

This is a truly defining moment.  Companies will be able to concentrate on winning and serving customers, rather than arguing about regulation.

Earning this level of liberation requires our total commitment to making the settlement work.  Our commitment is summed up in a set of legally enforceable undertakings. They will make the way we run our business totally transparent to the industry.

The most visible change is the launch of Openreach (previously referred to as Access Services) as a new BT Group business in January 2006.  It will be led by Steve Robertson as CEO, with a team of 30,000 BT people.

Openreach will ensure that communications providers have transparent and equal access to our local access and backhaul networks and their associated portfolio of products and services such as LLU* and WLR**. The access network is the important first mile of wire that connects homes and businesses to BT exchanges where every phone call and internet search is started.   

Our field force engineers will be at the heart of its operations installing new lines, upgrading the local network and maintaining the green cabinets at the side of the road.  They will deliver the highest possible standard of customer service - not just for BT but for all providers.

Openreach will soon become a household name, with vans re-sprayed with a new look that is different from the rest of the BT fleet.  While different, they are still part of BT.

Treating all communications providers in an equal and fair way also requires that we set up two separate product teams in BT Wholesale to manage products where we have a dominant position. 

To deliver this level of transparency, we must get our behaviour right too.

This means taking great care about the way we use information, to avoid giving preferential treatment to our own businesses. Certain commercial information can only be disclosed to other parts of BT if it is also being shared - at the same time and in the same way - with other communications providers. And, we can not share any customer’s confidential information without consent.

The settlement will re-energise the whole industry. It brings the clarity and certainty that companies need to invest, to take risks and to innovate.

There is now a sharper focus for BT Wholesale as it goes full steam ahead to build and implement 21CN.   While the promise of de-regulation brings BT Retail and Global Services the freedom to think creatively about what offer customers. 

So far, the strategic review has been led by policy makers. It is now time to learn about what these changes mean for the way we work.

There will be more information, and discussions at team meetings. Everyone will get a copy of a code of practice backed up with mandatory online training. 

We have an historic opportunity in front of us.  No one is excluded. What we do in our own domain - with our own customers and colleagues - contributes to the totality of what BT delivers in the marketplace.

This new settlement matters. It matters to the industry, to our customers and to shareholders.

Above all else, it matters to BT. 

Ben

22 September 2005