BT AGM 2012 – Premier League and fairer regulation of Pay TV
12th July 2012
BT shareholders gathered at Old Billingsgate in London on
July 11 for the company's Annual General Meeting. Senior
executives - including Chairman Sir Michael Rake and Chief
Executive Ian Livingston - were quizzed on a number of areas
including the company's share price, its new rights to screen
Premier League football, and the forthcoming Communications Bill.
Chairman Sir Michael Rake opened with an upbeat assessment of
BT's performance, reminding shareholders of the company's
strong year end results with profit before tax up 16% to
£2.4bn, free cash flow up to £2.5bn and total shareholder
returns of 224% over three years.
Chief Executive Ian Livingston said BT was still focussing on
driving broadband based consumer services and being the brand for
business in the UK. Customer complaints were down by more than half
over three years, but BT is investing in improving this even
further, he told shareholders.
BT's fibre broadband product, BT Infinity, is proving
popular with over 550,000 customers signed up. The service is
passing an additional 100,000 homes every week and expects to reach
two thirds of homes by 2014. With government funding BT expect to
be able to take fibre to 90% of the population. The company has
recruited over 1,200 new engineers to deliver its broadband
objectives.
Shareholders quizzed BT on whether its contractors are paid the
living wage. Sir Michael Rake said BT is discussing the issue with
the Living Wage Foundation - which recommends a minimum hourly rate
of £8.30 in London and £7.20 nationally - but said BT
cannot directly determine contractors' pay. He insisted that
BT's contractors are all paid at least the minimum wage and all
BT's direct employees receive at least the living wage.
One angry shareholder pointed out that BT's share price is
lower now than when Sir Michael Rake joined the company in 2008,
and suggested it was time for him to stand down. But Patricia
Hewitt, chair of the remuneration committee, defended Sir
Rake's commitment and said BT shareholder returns had been
amongst the best in telecoms in the last three years.
When asked about the effect on debt and future dividends of
BT's decision to pay around £800m for television rights to
screen 114 premier league football matches over three years, Rake
defended the move saying it was an important step for BT's
strategy. He said: "We need to go back to profitable growth
and we need to make sure we have content that makes our position
viable and profitable." Livingston pointed out the investment
was less than the £2.5 billion being invested in fibre and
said the company could absorb the cost through increased cashflow
and still reduce debt.
When asked what BT would most like to see in the
government's planned Communications Bill, Rake said it was an
important issue and ultimately BT is looking for a level playing
field for regulation. Livingston said BT was looking for their
competitors in the Pay TV sector, such as Sky, to be regulated
under the same principles as BT and required to make their premium
content available to other providers at a fair and reasonable
price.
Attending the AGM, CWU's deputy general secretary
Andy Kerr said: "BT's presentation showed
the company is performing well with customer service improving,
rapid fibre rollout and strong growth in take up of broadband
services, all of which relies on the skills and commitment of CWU
represented employees."
All 20 resolutions were carried by over 90% of votes in favour.
