Questions from the 2007 AGM held at The Sage, Gateshead on 19th July 2007

At the 2007 AGM Chairman Sir Christopher Bland and his fellow Board members answered questions from shareholders on a wide range of issues, including:

Ongoing training and skills development of BT people

Referring to the Leitch Review of the UK's long term skills commissioned by Gordon Brown a shareholder asked for an assurance that BT would continue its commitment to train the existing and future workforce. Sir Christopher Bland, BT's Chairman said that was a vital part of BT's drive to become a software driven services company. BT has already signed the "skills pledge" and will continue to invest significant funds ( £100m last year) to train its workforce for the coming challenges.

Payment by direct debit

A number of shareholders expressed their objection to BT's announcement to charge customers for paying their bills in cash or by cheque. The Chairman said that there was much misunderstanding around this issue and he wished to make it clear that the charge was not mandatory as customers had a choice of payment methods - including direct debit which carries no charge. Sir Christopher pointed out that some of BT's competitors do not offer any other option apart from direct debit and that BT was simply passing onto customers the transaction costs for cash or cheque payments.

BT's commitment to the North East

A shareholder expressed their concern about the job losses in the North East. Sir Christopher made it clear that there is no drive to reduce jobs in any region. However BT is transforming as a business and is creating jobs faster than it is losing them. 10,000 people are employed by BT in the North East which makes BT one of the biggest employers in the region. Sir Christopher was also asked what support is given to research and entrepreneurship arrangements in the area outside of the company's own facilities. The Chairman pointed out that BT has a great tradition of innovations and entrepreneurship and that it had strong research partnerships with Durham, Newcastle and Sunderland Universities.

Progress with BT Vision and Fusion

The Chairman was asked to comment on the progress of BT Vision, its recently launched broadband based entertainment service. Ian Livingston, CEO of BT Retail, said that around 7,500 people had signed up for BT Vision before advertising had started in May 2007. This number of people was the amount BT anticipated and this is now expected to grow steadily. In the past week BT had announced the a deal with Setanta that would enable BT Vision customers to watch a broad range of sports events. Mr Livingston emphasised that BT Vision could be chosen by customers on a pay per view basis - thus avoiding the large subscription charges levied by other competitors. The Chairman was also asked to update the meeting about the success of BT Fusion the company's converged mobile and landline service. Mr Livingston reported that more than 40,000 customers had chosen BT Fusion which was slightly below expectations. However this figure was expected to rise rapidly as a result of a range of new devices that were due to be launched shortly.

Broadband speeds

A shareholder asked if BT target speeds for broadband would be sufficient for future needs and provide BT with a competitive service in Europe. The Chairman replied that broadband speeds had increased considerably in recent years from 512k only a few years ago to 8Mb today. It is clear that speeds will continue to increase at the same time as better compression technologies became available. As a result the Chairman said he believed BT was in an excellent competitive position when compared to its European rivals.

Share buy back schemes

A shareholder asked if share buy back schemes were still good for BT considering the current level of the company's share price. BT is a top ten dividend yielding stock - even after its recent share buy back programme. Sir Christopher said that he believed a strong dividend and buy back policy was the best combination for shareholders. It saves BT more in dividends than it costs in interest and is therefore still very much in the interests of shareholders.