Company Presents a Vision Focused on Seamless Services
Yesterday BT announced a new strategy for its consumer business, setting the course for the consolidated BT Consumer division. The company oultined more than 20 initiatives, and here we summarise some of the main points. For a more in-depth analysis, please see BT Unveils New Consumer Strategy.
The announcement showed BT’s ambition to be a leader in the changing UK multiplay market. The company will continue to juggle its three consumer brands — BT, EE and Plusnet — with an approach focused on bundles of services by tapping into its vast network assets to deliver new products, and focusing on customer retention.
Keeping the individual brands ensures the focus for each is clearly defined. We believe BT will be geared toward the home, household needs and entertainment, EE will serve individual needs, while Plusnet remains positioned as a no-frills provider. That said, we’ve long held the view that BT will eventually have to make a decision about the viability of managing several brands. This is a costly effort to maintain and the move to converged products risks confusing customers.
During the announcement, Marc Allera, CEO of BT’s consumer brands, presented a vision that brings together its broadband, mobile and Wi-Fi networks in an effort to offer users seamless connectivity, underpinned by what he described as the UK’s first “smart” converged network. BT aims to complete this new network by 2022. The goal will be to offer users ubiquitous coverage regardless of connection type inside the home and beyond. This is an enviable point of differentiation over its rivals.
BT also announced the formation of a new business, the Consumer Partnership Unit, which will aim to foster relationships with companies in all areas to bring new products to market. This approach is being embraced for smart home products, with the EE brand being chosen to spearhead BT’s entry into this category. In a laudable move, it’s working with many of the leading smart home ecosystems — Apple, Amazon and Google. However, the connected home is a hugely complex and fragmented area with uncertain returns on investment. EE will need to be flexible in its positioning, refining and updating its offers in response to early customer behaviour.
But perhaps the biggest partnership announcement is with Amazon. BT will be the first UK operator to offer Prime Video to its customers. The move positions BT TV as an aggregator of content services: it builds on a recently renewed agreement with Netflix, and support for Sky’s Now TV service, which will be available from 2019. BT TV is set to be the first TV platform in the UK to offer all of these services from one destination.
All of the new product announcements reflected BT’s goal to deliver customer-centric products and services. A good example is the ability for EE customers to gift their data allowance to anyone on their family account each month. This is an innovative idea not currently offered by any other UK mobile operator.
We believe that BT’s extensive strategy update provides a much-needed boost to the group, especially in the wake of the widespread negative publicity it has endured in recent months. More importantly, the new structure and strategy offers more clarity on the future direction of the consumer segment, which has been in limbo for some time.
We expect the notion of providing subscribers with the best network, converged products and customer experience to resonate well. In our view, Mr Allera’s push for simplicity and a customer-friendly approach stands his business in good stead.
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