The Chairman and fellow Board members answered questions from shareholders on a range of issues, including:
Pension fund deficit
Sir Christopher was asked to clarify the amount of the pension fund deficit and to explain how quickly BT plans to address the issue. He explained that there are 'a number of different valuations for pension purposes', but the most significant from a shareholder and pensioner point of view is the funding valuation carried out by independent actuaries on behalf of the pension fund trustees. He said that 'this valuation revealed a deficit of £2.1 billion', and that BT has agreed a payment schedule of £232 million per annum to clear the deficit over 15 years. This compares to the previous deficiency payment of £200 million per annum. He emphasised that BT stood behind the pension fund.
BT call centres in India
Points were raised about the impact on both customer service and job retention in the UK of BT's decision to open two call centres in India. Sir Christopher, whilst recognising that this was a 'genuine concern' but ' misguided', pointed out that 'BT are establishing 33 next generation call centres, of which two will be in India', and made it clear that 'the bulk of our investment and the bulk of call centre jobs is going in the UK'. Pierre Danon, CEO of BT Retail, said: '...we have been very clear that we would not terminate one single job in the UK in order to transfer it to India. This has been guaranteed to all our people'. He confirmed that quality of service in the Indian call centres was 'no worse than it was in the UK, sometimes better'.
Share price performance
A shareholder asked why the BT share price had dropped. Sir Christopher suggested that 'as the telecoms, media and technology (TMT) bubble burst, BT along with other telecoms' stocks suffered disproportionately as compared with the FTSE 100'. He added that BT was not happy with the share price, but that 'since demerger our performance has been roughly in line with the FTSE and is better than the European and UK Telco sector'.
Asked to explain BT's broadband strategy, Sir Christopher described the current position of over one million broadband connections in the UK as 'a major achievement'. Pierre Danon explained BT's strategy to bring value-added services onto broadband, including gaming and home security services, and predicted that 'within the coming six months, you will see a flurry of broadband-based services which will increase the take-up'.
Ben Verwaayen, CEO, outlined 'a rollout plan that brings us to 90% (demographic coverage of the UK). That is absolutely world-class'.
Asked to reflect on BT's retirement policies in the light of recent government proposals to look at encouraging people to work longer, Sir Christopher answered: 'We have already begun a review of our retirement policies'. He predicted that the current BT retirement age of 60 '...will increasingly become an age around which people plan a change in their working conditions but is not necessarily an automatic retirement age'.
Asked a direct question 'Can you tell me which of the major political parties received the £48,788 and how much each party got?' Sir Christopher stated categorically that 'No money is given to any political party in Scotland, Wales, Northern Ireland, the United Kingdom'. He explained that BT did 'ask politicians of all parties to come to Adastral Park (our research facility) for educative reasons' and also took stands at all the major party conferences. He said this action was in order to inform politicians 'who, after all, have an important influence on the future of BT'.
BT 's policy is that no company in the group shall make cash contributions to any political party.