Posts Tagged ‘BT’
Unilever extends BT outsourcing contract
BT has been awarded an extension to its original seven-year outsourcing contract with Unilever. The deal, worth around an additional £270 million, will see BT continue to deliver Unilever’s voice, data and mobile services for an additional three years.
The original contract, announced in November 2002 and worth £670 million was the first comprehensive global telecommunications outsource contract ever undertaken by BT and is one of BT’s largest and most significant global deals. By working in partnership, BT and Unilever are in the process of transforming Unilever’s infrastructure to one of the most modern corporate networks in the world.
Andy Green, CEO of BT Global Services, said: “Unilever’s decision to extend this relationship with BT to 2012 illustrates their confidence in our capacity to continue to add value to their business, drive efficiencies and further strengthen their ability to compete in a challenging environment. We look forward to delivering further benefits in partnership with Unilever over the next six years.”
Neil Cameron, Unilever chief information officer, said: “I am delighted that we have been able to re-sign this contract with BT. The first three years of the agreement have delivered both in cost and service, clearly demonstrating that the bold decision taken by both companies in 2002 was justified. By extending this contract to 2012, I am confident that together we will be able to drive value for both our organisations in an area of technology that is clearly undergoing radical change”.
In addition to the high quality global communications network BT is also implementing a variety of new services including IP solutions and satellite technology. Prior to outsourcing to BT, Unilever worked with multiple telecommunications suppliers globally.
Unilever manufactures 400 brands globally including – Lipton, Dove, Sunsilk, Walls, Knorr and Persil.
BT publishes the demerger documentation - posting to BT shareholders begins today
BT today published documents relating to proposals for the demerger of its mobile business, mmO2, and the creation of two new holding companies. Posting of some of these documents, including a shareholder circular describing the proposals to BT shareholders, will also begin today.
The demerger forms part of BT’s restructuring strategy which was first announced on May 10, 2001.
If approved, two holding companies, BT Group plc and mmO2 plc, will be created. BT Group will comprise principally four separately managed lines of business - BT Retail, BT Wholesale, BTopenworld, and BT Ignite - together with its Concert joint venture. mmO2 plc will be made up of BT Cellnet, Digifone (formerly known as Esat Digifone), Telfort Mobiel, Viag Interkom, Manx Telecom and Genie.
Sir Christopher Bland, chairman of BT, said: “BT shareholders will soon be receiving details of the demerger, giving them the information necessary to make an informed decision on the best way forward. It is important that shareholders use their vote and I am confident they will do so to support the demerger proposals, creating BT Group plc and mmO2 plc.
“BT Group’s aim going forward will be to create value; value based on service excellence, brand leadership, large scale networks and our extensive customer base. We will also develop and market new, higher value broadband and Internet products and services.”
David Varney, chairman of mmO2 plc, said: “This is an important day for us - it marks another milestone in the birth of mmO2, a business which will continue to be a leading player in the European mobile industry. We are committed to creating shareholder value as a member of the FTSE 100 by tight management focus, growing our wholly owned businesses and continuing our leadership in mobile data.”
Shareholder approval is being sought to implement the proposals at two meetings, a Court Meeting and an Extraordinary General Meeting (EGM). Notices convening these meetings, to be held in Hall 5 at the NEC, Birmingham, on October 23, 2001, are set out in the shareholder circular. BT shareholders can vote on the proposals by signing and completing the forms of proxy sent to them, and returning them either by post or fax. Shareholders can also vote by appointing a proxy, by using the Internet or by telephone, or by attending the meeting.
If the proposals are implemented as expected, the Scheme is expected to become effective on November 16, 2001, the demerger will become effective on November 19, 2001 and trading in both the BT Group plc shares and mmO2 plc shares will commence on November 19, 2001.
Notes for Editors
BT Group plc
BT Group plc will comprise principally four separately managed lines of business - BT Retail, BT Wholesale, BTopenworld, and BT Ignite - together with its Concert joint venture. BT Retail and BT Wholesale are well established, cash generative businesses with market leading positions in the UK, while BTopenworld and BT Ignite are rapidly developing businesses, active in the markets for Internet and data services, solutions and broadband.
BT Retail
BT Retail is the UK’s largest communications service provider, by market share, to residential and business markets. As at June 30, 2001, BT Retail provided 28.2 million customer lines (exchange line connections) equating to a UK market share of approximately 83 per cent. Some nine million of these were business lines and lines for other service providers. In the opinion of the directors, BT’s relationship with its customer base represents a major strength and it is the directors’ intention to broaden the range of services offered by BT Group, in order to reinforce this relationship.
BT Wholesale
BT Wholesale has the largest capacity network in the UK with the greatest geographical reach and customer coverage. BT Wholesale provides network services and solutions within the UK to communications companies, network operators and service providers. BT Wholesale aims to reduce its dependence on its regulated business and grow its sales to other communications companies. Its strategy is to provide total customer solutions, broaden its customer base, build and develop relationships with other parts of BT Group, other network operators and major communication suppliers, and establish a reputation for outstanding service delivery. Its investment strategy will satisfy demand for bandwidth and apply new technology to boost capacity, provide the platform for next generation products and services and reduce costs.
BTopenworld
BTopenworld brings together in a single business all of BT’s mass market ISPs and Internet-related activities. It serves consumers and SMEs in the UK with a range of narrowband and broadband Internet access and related services. BTopenworld aims to generate additional revenues for the Group by providing customers with services that add value to the basic telephony service, earning subscription and advertising and e-commerce revenues.
BT Ignite
BT Ignite is BT’s international, datacentric solutions and broadband IP business. It has established a strong European footprint, serving business customers with 52,000 route kilometres of fibre connecting 250 cities and 22 content hosting centres. BT Ignite delivers a range of services, including customer solutions, application service packages, web hosting, media services and data transport. BT Ignite plans to continue to build its revenues from the high end of the value chain. Value-added services, complex business solutions, hosting and media distribution currently represent over 60 per cent of BT Ignite’s turnover.
Recent developments
BT is continuing discussions with AT&T concerning the future of the Concert joint venture. Options currently being considered include unwinding the Concert joint venture. Other strategic alternatives to Concert are still being discussed, including continuation of the venture in a modified form. In the event that an unwinding of the Concert joint venture is agreed, and depending on the way that it is implemented, the financial effects on the Group are likely to include cash and non-cash restructuring costs which could be substantial. These discussions are dealt with in more detail in the shareholder circular.
In addition, BT expects to take an impairment charge against certain of its other investments, including AT&T Canada, in its half year results to 30 September 2001, totalling approximately £500 million. BT’s investment in AT&T Canada is discussed in more detail in the shareholder circular.
BT expects to complete a sale and leaseback property transaction by 31 December 2001, under which it expects to receive proceeds of approximately £2.3 billion. The Board now expects to reduce net debt to between £15 billion and £17 billion at 31 March 2002 on the assumption that the property sale and leaseback transaction has been completed.
Dividends
The Board has decided that there will be no interim dividend for the year ending 31 March 2002. The board of BT Group plc expects to recommend a final dividend for the BT Group in respect of the year ending 31 March 2002 and to resume regular dividend payments thereafter. However, the level of dividends which BT Group expects to pay is likely to be substantially lower than that paid by BT previously.
mmO2 plc
mmO2 plc will be made up of BT Cellnet, Digifone (formerly known as Esat Digifone), Telfort Mobiel, Viag Interkom, Manx Telecom and Genie. It is a leading player in the European mobile market and is expected to be a member of the FTSE 100 in the UK. The company has a strong European footprint of wholly owned businesses comprising established mobile operations in the UK and Ireland, and rapidly growing businesses in Germany and the Netherlands.
mmO2 plc serves more than 16 million mobile customers in the UK, Germany, Ireland, the Netherlands and the Isle of Man. Together, these markets represent a total population of more than 160 million people. mmO2 plc is a leader in mobile data and Internet in Europe and is well positioned for GPRS and UMTS success. Genie, its mobile Internet portal, is already one of the leading mobile Internet businesses in Europe. mmO2’s strategy is to:
- increase its market share of higher value customers, especially business and high usage individuals and young adults, who have been early adopters of data services
- achieve competitive scale in Germany and the Netherlands
- focus on customer retention through good customer service and network quality
- reduce costs by tight budgetary control and innovative measures, such as the recently announced, network sharing deal with T-Mobile in Germany and One2One in the UK
- exploit opportunities for performance improvement by integration across mmO2 plc, helped by the focus of the new O2 brand.
mmO2 plc has an experienced management team and its growth will be underpinned by its financial flexibility, carrying approximately £500 million of net debt on demerger, and having a funding facility of £3.5 billion to finance the development of its business.
Further information on the demerger
price. Both BT Group shares and mmO2 shares will be traded on the London Stock Exchange and their ADSs will be traded on the New York Stock Exchange. No application is being made for either BT Group shares or mmO2 shares to be listed in Japan.
The Court Meeting, which will be held at the direction of the Court, has been convened for 10.30 am on October 23, 2001 to enable BT shareholders to vote on the Scheme of Arrangement (”Scheme”).
EGM
The EGM, to be held immediately following the end of the Court Meeting, is being convened to ask BT shareholders to consider resolutions to give effect to the Scheme and approve the demerger. BT shareholders will also be asked to approve the mmO2 share schemes. Shareholder approval is not being sought for the BT Group share schemes since they are substantially the same as the BT share schemes for which approval has already been obtained where required.
The proposals include a capital reduction in BT Group plc, following the demerger, in order to increase the level of reserves available for future distributions to shareholders or to facilitate future transactions. Shareholders will be asked to approve this at the EGM and the Court will be asked to confirm the reduction on November 20,2001 (to take effect on November 21, 2001).
Tax
For the purposes of UK taxation of capital gains (”CGT”), the Scheme should constitute a scheme of reconstruction. Clearance has been obtained from the Inland Revenue in respect of the Scheme under section 138 of the Taxation of Chargeable Gains Act 1992 (”TCGA”). Accordingly, a BT shareholder will not be treated as making a disposal for CGT purposes of his BT shares as a result of receiving mmO2 shares under the Scheme, and so no chargeable gain or allowable loss will arise on the cancellation of BT shares and the issue of mmO2 shares to him or her. Such mmO2 shares will be treated as the same asset as the BT shares, acquired on the same date and for the same consideration as the BT shares were acquired.
Clearance has been obtained from the Inland Revenue under section 138 TCGA in respect of the demerger. Accordingly, a holder of mmO2 shares will not be treated as making a disposal for CGT purposes when he or she receives BT Group shares pursuant to the demerger. Any gain or loss which would otherwise have arisen on a part disposal of mmO2 shares will be “rolled over” into the BT Group shares received by the shareholder pursuant to the demerger. Such BT Group shares will be treated as the same asset as the mmO2 shares, acquired on the same date and for the same consideration as the mmO2 shares were acquired. Accordingly, following the Scheme and the demerger, a shareholder’s original base cost in his/her BT shares will be apportioned between his/her mmO2 shares and his/her BT Group shares by reference to the market quotations of the mmO2 shares and the BT Group shares on the first day of dealings in such shares as derived from the Official List.
Shareholder Helpline
A shareholder helpline has been set up on Freefone 0808 100 4141. This operates between 8.30 am and 8.30 pm, Monday to Friday, and 10.00 am to 4.30 pm on Saturdays, Sundays and UK public holidays. For legal reasons the helpline will not be able to provide advice on the merits of BT’s proposals or to provide financial advice.
The contents of this press announcement, which has been issued by, and is the sole responsibility of, British Telecommunications public limited company, has been approved by Cazenove & Co. Ltd which is regulated in the UK by The Securities and Futures Authority, solely for the purposes of Section 57 of the Financial Services Act 1986. Prices and values of, and income from, shares may go down as well as up and an investor may not get back the amount invested. It should be noted that past performance is no guide to future performance. Persons needing advice should consult an independent financial adviser.
BT Wireless to adopt new brand, O2
BT Wireless, the mobile business of BT, today announced that the new consumer brand for the business will be O2. The holding company name will be changed to mmO2 plc effective immediately and upon demerger from BT, planned for later this year, the ordinary shares will be listed under this new name.
The operating units are expected to commence full migration to O2 for their customer products and services in Spring 2002.
The new brand, O2, embodies the Company’s ambition to provide essential, lifestyle-enabling mobile services to its customers. The Company’s strategy is to create one customer brand across its European footprint. The Company currently serves 16.1 million mobile customers in the UK, Germany, Ireland, the Netherlands and the Isle of Man. Genie, its integrated web and mobile portal, is one of the leading mobile internet businesses in Europe with 5.3 million registered accounts.
The unveiling of the new brand is an important milestone for the Company in the demerger process. This move follows BT Group’s announcement in May this year of plans to create two separately quoted businesses.
The new brand, developed in conjunction with brand agency Lambie Nairn, follows customer research and evaluation in each of the countries in which the Company operates. The results of the research demonstrate that the brand is recognisable and works internationally.
Peter Erskine, Chief Executive Officer of mmO2 plc, said: “We have chosen a brand identity that is modern and universal. We aim to build inseparable relationships with our customers, by delivering exciting and practical services they truly value. O2 symbolises commitment.”
Milestones in formation of mmO2 plc