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|Public limited company|
|Traded as||LSE: BT.A|
FTSE 100 Component
|Headquarters||BT Centre, |
|Revenue||£24.062 billion (2017)|
|£4.135 billion (2017)|
|£1.908 billion (2017)|
Number of employees
BT Group plc (trading as BT and formerly British Telecom) is a British multinational telecommunications holding company headquartered in London, United Kingdom. It has operations in around 180 countries and is the largest provider of fixed-line, broadband and mobile services in the UK, and also provides subscription television and IT services.
BT's origins date back to the founding of the Electric Telegraph Company in 1846 which developed a nationwide communications network. In 1912, the General Post Office, a government department, became the monopoly telecoms supplier in the United Kingdom. The Post Office Act of 1969 led to the GPO becoming a public corporation. British Telecommunications, trading as British Telecom, was formed in 1980, and became independent of the Post Office in 1981. British Telecommunications was privatised in 1984, becoming British Telecommunications plc, with some 50 percent of its shares sold to investors. The Government sold its remaining stake in further share sales in 1991 and 1993. BT is a Royal Warrant holder of the British Royal Family and has a primary listing on the London Stock Exchange, a secondary listing on the New York Stock Exchange, and is a constituent of the FTSE 100 Index.
BT controls a number of large subsidiaries. BT Global Services division supplies telecoms services to corporate and government customers worldwide, and its BT Consumer division supplies telephony, broadband, and subscription television services in Great Britain to around 18 million customers. In January 2016, BT acquired EE for £12.5 billion.
A number of privately owned telegraph companies operated in Britain from 1846 onwards. Among them were
With the invention of the telephone by Alexander Graham Bell in 1876 the GPO began to provide telephone services from some of its telegraph exchanges. In 1882 the Postmaster-General, Henry Fawcett started to issue licences to operate a telephone service to private businesses and the telephone system grew under the GPO in some areas and private ownership in others. The GPO's main competitor, the National Telephone Company, emerged in this market by absorbing other private telephone companies, prior to its absorption into the GPO in 1912.
The trunk network was unified under GPO control in 1896 and the local distribution network in 1912. A few municipally owned services remained outside of GPO control. These were Kingston upon Hull, Portsmouth and Guernsey. Hull still retains an independent operator, Kingston Communications, though it is no longer municipally controlled.
The British Telecom brand was introduced in 1980. On 1 October 1981, this became the official name of Post Office Telecommunications, which became a state-owned corporation independent of the Post Office under the provisions of the British Telecommunications Act 1981. In 1982 BT's monopoly on telecommunications was broken with the granting of a licence to Mercury Communications.
On 19 July 1982, the Government announced its intention to sell shares in British Telecom to the public. On 1 April 1984, British Telecommunications was incorporated as a public limited company (plc) in anticipation of the passing of the Telecommunications Bill. This Bill received Royal Assent on 12 April, and the transfer to British Telecommunications plc from British Telecom as a statutory corporation of its business, its property, its rights and liabilities took place on 6 August 1984.
Initially all shares in the new plc were owned by the Government. In November 1984, 50.2% of the new company was offered for sale to the public and employees. Shares were listed in London, New York, and Toronto and the first day of trading on was 3 December 1984. The Government sold half its remaining interest in December 1991 and the other half in July 1993. In July 1997, the new Labour Government relinquished its Special Share ("Golden Share"), retained at the time of the flotation, which had effectively given it the power to block a takeover of the company, and to appoint two non-executive directors to the Board.
In the 1990s, BT entered the Irish telecommunications market through a joint venture with the Electricity Supply Board, the Irish state owned power provider. This venture, entitled Ocean, found its main success through the launch of Ireland's first subscription-free dial-up ISP, oceanfree.net. As a telecoms company it found much less success, mainly targeting corporate customers. BT acquired 100% of this venture in 1999.
In June 1994 BT and MCI Communications launched Concert Communications Services which was a $1 billion joint venture between the two companies. Its aim was to build a network which would provide easy global connectivity to multinational corporations.
This alliance progressed further on 3 November 1996 when the two companies announced that they had agreed to a merger, creating a global telecommunications company called Concert plc. The proposal gained approval from the European Commission, the US Department of Justice, and the US Federal Communications Commission and looked set to proceed.
However, in light of pressure from investors reacting to the slide in BT's share price on the London Stock Exchange, BT reduced its bid price for MCI, releasing MCI from its exclusivity clause and allowing it to speak to other interested parties. On 1 October 1997, Worldcom made a rival bid for MCI which was followed by a counter-bid from GTE. Because Worldcom used its stock to leverage its purchase, as opposed to cash (used by BT), it was able to outbid BT. MCI accepted the Worldcom bid and BT pulled out of the deal with a severance fee of $465 million.
BT sold its stake in MCI to Worldcom in 1998 for £4,159 million, on which it made a pre-tax profit of £1,133 million. As part of the deal, BT also bought out from MCI its 24.9% interest in Concert Communications, thereby making Concert a wholly owned part of BT.
The reaction to the failure of the deal in the City of London was critical of then Chairman Iain Vallance and CEO Peter Bonfield, and the lack of confidence from the failed merger led to their removal.
As BT now owned Concert, and still wanted access to the North American market, it needed a new partner. An AT&T/BT option had been mooted in the past, but stopped on regulatory grounds due to their individual virtual monopolies in their home markets. By 1996, this had receded to the point where a deal was possible. However, the former monopolies clashed in management and culture – and the alliance never really worked from the start. Also, during the proposed MCI merger position, BT/MCI had placed a series of nominated customers inside Concert to overcome regulatory issues, leaving Concert with a sales force. On merger with AT&T, it was reversion to delivery of a series of Global products, and two competing owners – which robbed Concert of revenues and left its management disillusioned.
At its height, the Concert managed network directly reached more than 800 cities in 52 countries, and interlinked to about 240 other networks to extend access to 1,300 cities in 130 countries. Although Concert continued signing customers, its rate of revenue growth slowed, so that in 1999 David Dorman was made CEO with a brief to revive it.
In late 2000 the BT and AT&T boards fell-out – partly due to each partner's excess debt, and the resulting board room clear-outs – partly due to Concert's $800 million annual losses. AT&T recognized that Concert was a threat to its ambitions if left intact, and so negotiated a deal where Concert was split in two in 2001: North America and Eastern Asia went to AT&T, the rest of the world and $400M to BT. BT's remaining Concert assets were merged into its BT Ignite, later BT Global Services group .
In 2000, BT acquired Esat Telecom Group plc, and all its subsidiary companies, and Ireland On Line. It also purchased Telenor's minority shareholding in Esat Digifone. The Esat Telecom Group was split in two with the landline and internet operations were combining with Ocean to became part of BT Ignite. Esat Group was renamed Esat BT in July 2002, and eventually BT Ireland in April 2005. Esat Digifone became part of BT Wireless, before being spun off into a separate independent company mmo2 plc (now Telefónica Europe). EsatBT installed the first DSL lines in Ireland, to try and compete heavily with former state telecoms company Eircom and operate one exchange, in Limerick. It is also the second largest fixed line telecommunications company in Ireland behind the former monopoly operator, Eircom.
By 2001, BT had a debt of £30 billion, much of which was acquired during the bidding round for the 3rd generation mobile telephony (commonly known as 3G) licences. It had also failed in its series of proposed global mergers, and the funds flowing from its then virtual monopoly of the UK market place had been largely removed. It was also headed by two executives who had little support from the London Stock Exchange, particularly in light of a 60% drop in share price in sixteen months.
Philip Hampton joined as CFO, and in April 2001 Sir Iain Vallance was replaced as Chairman by recognised turn around expert Sir Christopher Bland. The company then began to sell off or sell and lease back a large part of its assets.
In May 2001 BT carried out corporate Europe's largest ever rights issue, allowing it to raise £5.9 billion. A few days before, it sold stakes in Japan Telecom, in mobile operator J-Phone Communications, and in Airtel of India to Vodafone.
A demerger followed in November 2001, when the former mobile telecommunications business of BT, BT Cellnet, was hived off as a separate business named "mmO2". This included BT owned or operated networks in other countries, including BT Cellnet (UK), Esat Digifone (Ireland), and Viag Interkom (Germany). All networks now owned or operated by mmO2 (except Manx Telecom) were renamed as O2. The de-merger was accomplished via a share-swap, all British Telecommunications plc shareholders received one mmO2 plc and one BT Group plc (of which British Telecommunications is now a wholly owned subsidiary) share for each share they owned. British Telecommunications plc was de-listed on 16 November, and the two new companies started trading on 19 November.
During Bonfield's tenure the share price went from £4 to £15, and back again to £5. Bonfield's salary to 31 March 2001 was a basic of £780,000 (increasing to £820,000) plus a £481,000 bonus and £50,000 of other benefits including pension. He also received a deferred bonus, payable in shares three years' later, of £481,000, and additional bonuses of £3.3 million.
mmO2 plc was replaced by O2 plc in a further share-swap in 2005, and subsequently bought in an agreed takeover by Telefónica for £18 billion and delisted. In 2004, BT launched Consult 21, a consultation organisation that was to aid BT 21CN in the eventual conversion to digital telephony.
In 2004, BT was awarded the contract to deliver and manage N3, a secure and fast broadband network for the NHS National Programme for IT (NPfIT) program, on behalf of the English National Health Service (NHS).
In 2005 BT made a number of acquisitions. In February 2005, BT acquired Infonet (now re-branded BT Infonet), a large telecoms company based in El Segundo, California, giving BT access to new geographies. It also acquired the Italian company Albacom. Then in April 2005, it bought Radianz from Reuters (now rebranded as BT Radianz), which expanded BT's coverage and provided BT with more buying power in certain countries.
In October 2006, BT confirmed that it would be investing 75% of its total capital spending, put at £10 billion over five years, in its new Internet Protocol (IP) based 21st century network (21CN). Annual savings of £1 billion per annum were expected when the transition to the new network was to have been completed in 2010, with over 50% of its customers to have been transferred by 2008. (For actual progress see BT 21CN). That month the first customers on to 21CN was successfully tested at Adastral Park in Suffolk.
In January 2007, BT acquired Sheffield-based ISP, PlusNet plc, adding 200,000 customers. BT stated that PlusNet will continue to operate separately out of its Sheffield head-office. On 1 February 2007, BT announced agreed terms to acquire International Network Services Inc. (INS), an international provider of IT consultancy and software.
BT acquired Wire One Communications in June 2008 and folded the company into "BT Conferencing", its existing conferencing unit, as a new video business unit In July 2008, BT acquired the online business directory firm Ufindus for £20 million in order to expand its position in the local information market in GB. On 28 July 2008, BT acquired Ribbit, of Mountain View, California, "Silicon Valley's First Phone Company". Ribbit provides Adobe Flash/Flex APIs, allowing web developers to incorporate telephony features into their software as a service (SaaS) applications.
In the early days of its fibre broadband rollout, BT said it would deliver fibre-to-the-premises (FTTP) to around 25% of the Country, with the rest catered for by the slower fibre-to-the-cabinet (FTTC), which uses copper wiring to deliver the final stretch of the connection. In 2014, with less than 0.7% of the company's fibre network being FTTP, BT dropped the 25% target, saying that it was "far less relevant today" because of improvements made to the headline speed of FTTC, which had doubled to 80Mbit/s since its fibre broadband rollout was first announced. To supplement FTTC, BT offered an 'FTTP on Demand' product. In January 2015, BT stopped taking orders for the on-demand product.
On 1 April 2009, BT Engage IT was created from the merger of two previous BT acquisitions, Lynx Technology and Basilica. Apart from the name change not much else changed in operations for another 12 months. On 14 May 2009, BT said it was cutting up to 15,000 jobs in the coming year after it announced its results for the year to 31 March 2009. Then in July 2009, BT offered workers a long holiday for an up front sum of 25% of their annual wage or a one-off payment of £1000 if they agree to go part-time.
On 6 April 2011, BT launched the first online not-for-profit fundraising service for UK charities called BT MyDonate as part of its investment to the community. The service will pass on 100% of all donations made through the site to the charity, and unlike other services which take a proportion as commission and charge charities for using their services, BT will only pass on credit/debit card charges for each donation. The service allows people to register to give money to charity or collect fundraising donations. BT developed MyDonate with the support of Cancer Research UK, Changing Faces, KidsOut, NSPCC and Women's Aid.
In March 2013, BT was allocated 4G spectrum in the UK following an auction and assignment by Ofcom, after paying £201.5m.
On 1 August 2013, BT launched its first television channels, BT Sport, to compete with rival broadcaster Sky Sports. Plans for the channels' launch came about when it was announced in June 2012 that BT had been awarded a package of broadcast rights for the Premier League from the 2013–14 to 2015–16 season, broadcasting 38 matches from each season. In February 2013, BT acquired ESPN Inc.'s UK and Ireland TV channels, continuing its expansion into sports broadcasting. ESPN America and ESPN Classic were both closed, while ESPN continued to be operated by BT. On 9 November 2013, BT announced it had acquired exclusive rights to the Champions League and Europa League for £897m, from the 2015 season, with some free games remaining including both finals.
On 1 November 2014, BT created a new central business services (CBS) organisation to provide customer services and improve operational efficiency levels.
On 24 November 2014, shares in BT rose considerably on the announcement that the company was in talks to buy back O2, while at the same time confirmed it was also in talks to acquire EE. BT subsequently entered into exclusive talks to buy EE for £12.5 billion on 15 December 2014 and confirmed on 5 February 2015, subject to regulatory approval. The deal will combine BT's 10 million retail customers and EE's 24.5 million direct mobile subscribers. Deutsche Telekom will own 12% of BT, while Orange S.A. will own 4%.
In March 2015, launched a 4G service as BT Mobile BT Group CEO Gavin Patterson announced that BT plans to migrate all of its customers onto the IP network by 2025, switching off the company's ISDN network.
On 15 January 2016, BT received final unconditional approval by the Competition and Markets Authority to acquire EE. The deal was officially completed on 29 January 2016 with Deutsche Telekom now owning 12% of BT, while Orange S.A. own 4%.
On 1 February 2016, BT announced a new organisational structure that will take effect from April 2016 following the successful acquisition of EE. The EE brand, network and high street stores will be retained and will become a second consumer division, operating alongside BT Consumer. It will serve customers with mobile services, broadband and TV and will continue to deliver the Emergency Services Network contract which was awarded to EE in late 2015. There will be a new BT Business and Public Sector division that will have around £5bn of revenues and will serve small and large businesses as well as the public sector in the UK and Ireland. It will comprise the existing BT Business division along with EE's business division and those parts of BT Global Services that are UK focused. There will also be another new division; BT Wholesale and Ventures that will comprise the existing BT Wholesale division along with EE's MVNO business as well as some specialist businesses such as Fleet, Payphones and Directories. Gerry McQuade, currently Chief Sales and Marketing Officer, Business at EE, will be its CEO.
On 8 June 2017, BT appointed KPMG as its new auditor to replace PwC in the wake of the fraud scandal in Italy that triggered a major profit warning earlier this year. In last April, KPMG fired six US employees over a scandal that calls into question efforts to ensure that public company accounts are being properly scrutinised.
On 8 July 2017, The Daily Telegraph reported that BT "has called in consultants from McKinsey to conduct a review of its businesses in the hope of saving hundreds of millions of pounds per year. The work, dubbed 'Project Novator', is understood to include a potential merger of BT's struggling global services corporate networking and IT unit with its business and public sector division".
On 28 July 2017, BT announced organisational changes to "simplify its operating model, strengthen accountabilities and accelerate its transformation" and involves bringing together its BT Consumer and EE divisions into a new unified BT Consumer division that will operate across three brands – BT, EE and Plusnet. It will take effect from 1 April 2018.
On 18 April 2018, BT announced further organisational changes following unification of its BT Consumer and EE divisions, and involves bringing together its BT Business and Public Sector and BT Wholesale and Ventures divisions into a new unified division known as BT Enterprise. It will also include BT's Ventures business which "acts as an incubator for potential new growth areas of the company" and will report as a single unit from 1 October 2018.
BT Group is a holding company; the majority of its businesses and assets are held by its wholly owned subsidiary British Telecommunications plc. BT's businesses are operated under special government regulation by the British telecoms regulator Ofcom (formerly Oftel). BT has been found to have significant market power in some markets following market reviews by Ofcom. In these markets, BT is required to comply with additional obligations such as meeting reasonable requests to supply services and not to discriminate.
BT runs the telephone exchanges, trunk network and local loop connections for the vast majority of British fixed-line telephones. Currently BT is responsible for approximately 28 million telephone lines in GB. Apart from KCOM Group, which serves Kingston upon Hull, BT is the only UK telecoms operator to have a Universal service Obligation, (USO) which means it must provide a fixed telephone line to any address in the UK. It is also obliged to provide public call boxes.
As well as continuing to provide service in those traditional areas in which BT has an obligation to provide services or is closely regulated, BT has expanded into more profitable products and services where there is less regulation. These are principally, broadband internet service and bespoke solutions in telecommunications and information technology.
As BT operates in around 180 countries, it owns and leases a range of buildings and facilities in the UK and around the world. In 2001, it sold some of its UK property portfolio for £2.38 billion to Telereal Trillium in a 30-year leaseback. The deal included 6,700 properties and contributed towards alleviating its debt at the time, with the main advantage being flexibility as it allows BT to vacate property over time, so as to adapt to changing operational requirements.
Some of its UK buildings and stations are:
BT remains one of the largest owners of telecommunications towers in the UK and were a major node in its microwave network. Its BT Tower in London is notable for numerous reasons such as being the tallest building in the UK from its construction in the 1960s until the early 1980s, its revolving restaurant at the top known as 'Top of the Tower' in operation through the late 1960s and 1970s, and remains one of the UK's most important communications nerve centres, the heart of a vast broadcasting and communications network. It carries approximately 95% of the UK's TV content, including live broadcasts and 99% of all live football games as well as pioneering the first international HD, 3D and 4K television transmissions. It serves media production and distribution customers around the world and as part of the Things Connected Network launched in London, it became the highest building in the world to host an Internet of things (IoT) base station in September 2016. Some of its towers are:
Some of its other UK facilities are:
BT Group is organised into the following divisions:
BT has the largest defined benefit pension plan of any UK public company. The trustees valued the scheme at £36.7 billion at the end of 2010; an actuarial valuation valued the deficit of the scheme at £9.043 billion as of 31 December 2008. Following a change in the regulations governing inflation index linking, the deficit was estimated at £5.2 billion in November 2010.
On 31 July 2012, it was announced that BT agreed a three-year sponsorship deal with Ulster Rugby and sees BT become the Official Communications Partner. BT's logo will appear on the Ulster Rugby shirt sleeve for all friendlies, Heineken Cup and RaboDirect Pro12 matches as well as a significant brand presence at their home ground; Ravenhill Stadium.
On 29 July 2013, it was announced that BT had partnered up with Scottish Rugby Union in a four-year sponsorship deal with its two professional clubs; Edinburgh Rugby and Glasgow Warriors that will commence from August 2013. The deal involves BT Sport becoming the new shirt sponsor for both clubs as well as being promoted with BT Group at their respective home grounds; Scotstoun Stadium and Murrayfield Stadium.
On 28 May 2014, it was announced that BT agreed a £20 million four-year sponsorship deal with Scottish Rugby Union which includes BT securing the naming rights for Murrayfield Stadium which becomes BT Murrayfield Stadium, become sponsor of the Scotland sevens team, become principal and exclusive sponsor of Scotland's domestic league and cup competitions from next season, taking over the role from The Royal Bank of Scotland Group (RBS), and become sponsor of Scottish Rugby's four new academies that aims to drive forward standards for young players who have aspirations to play professionally.
On 14 April 2015, it was announced that as part of BT's current £20 million four-year sponsorship deal with Scottish Rugby Union that was announced in May 2014, BT has completed its sponsorship portfolio following an additional investment of £3.6 million for the 3 years remaining of its sponsorship deal, to become the new shirt sponsor for the Scotland national teams.
On 27 January 2016, it was announced that BT, alongside YouTube will be the new joint headline sponsors in a three-year deal with Edinburgh International Television Festival. The two companies will "share prominence across all branding of the 41st TV Festival, including the famous MacTaggart Lecture and will work closely with the festival organisers in their bid to reflect new trends in a rapidly transforming industry, from new ways of distributing content to technical innovations such as Virtual Reality".
BT is the founding and principal partner of the Wayne Rooney Foundation, which was established to improve the lives of children and young people. The Foundation will run events "to raise vital funds to support the work of key organisations dedicated to supporting disadvantaged and vulnerable children and young people". These organisations are four chosen charities which are, Manchester United Foundation, NSPCC, Claire House Children's Hospice and Alder Hey Children's Hospital. The first of these events was Wayne's testimonial match in August 2016 between Manchester United F.C. and Everton F.C. which raised £1.2 million. The match was screened live through BT Sport with BT MyDonate being the official fundraising platform for the testimonial, with both online and text options for donations promoted during the match.
On 26 May 2017, it was announced that BT is to sponsor the 2017 British Urban Film Festival (BUFF) and sees BT host every event of the film festival, including the Awards at the BT Tower. BT will also broadcast the awards ceremony on BT.com and will have the opportunity to screen films acquired from the festival on its BT TV store platform.
On 6 September 2017, it was announced that BT had extended its current £20 million four-year sponsorship deal with Scottish Rugby Union that was announced in May 2014, for a further three years beginning from June 2018. The new deal sees BT retain the naming rights to BT Murrayfield Stadium, alongside its role as principal partner of the Scotland national team and Scotland 7s. BT's logo will continue to be displayed on the front of Scotland rugby shirts across the world, in the Six Nations Championship, as well as the summer and autumn test matches. BT will also continue to be promoted at Edinburgh Rugby and Scotstoun Stadium in Glasgow.
BT's financial results have been as follows:
|Year ending 31 March||2008||2009||2010||2011||2012||2013||2014||2015||2016||2017|
|Profit/(loss) before tax (£m)||1,976||(134)||1,007||1,717||2,421||2,501||2,827||3,172||3,473||2,354|
|Net profit/(loss) (£m)||1,738||(81)||1,029||1,504||2,003||2,091||2,018||2,135||2,588||1,908|
|Basic eps (p)||21.5||3.2||13.3||19.4||23.7||26.7||25.7||26.5||33.2||19.2|
|Year ending 31 March||1992||1993||1994||1995||1996||1997||1998||1999||2000||2001||2002||2003||2004||2005||2006||2007|
|Profit/(loss) before tax (£m)||3,073||1,972||2,756||2,662||3,019||3,203||3,214||4,295||2,942||(1,031)||1,461||3,157||1,945||2,693||2,633||2,484|
|Net profit/(loss) (£m)||2,044||1,220||1,767||1,731||1,986||2,077||1,702||2,983||2,055||(1,875)||1,008||2,702||1,414||1,539||1,644||2,852|
|Basic eps (p)||33.2||19.8||28.5||27.8||31.6||32.8||26.6||46.3||31.7||(25.8)||12.1||31.4||16.4||18.1||19.5||34.4|
In 2004 the BT Group signed the world's largest renewable energy deal with npower and British Gas, and now all of their exchanges, satellite networks and offices are powered by renewable energy. BT is a member of the Corporate Leaders Group on Climate Change. They signed a letter urging the government to do more to tackle this problem. Janet Blake, head of global corporate social responsibility at BT, says that she would like to see incentives that find ways of rewarding those companies that focus on climate change by making investments in green business models.
BT has made it clear that it has an ambitious plan to reduce carbon dioxide emissions. Its strategy includes steps to reduce the company's carbon footprint as well as those of customers, suppliers and employees. BT has pledged to achieve an 80% reduction by the year 2016, which will require further efficiency improvements.
In 2001, BT discovered it owned a patent (U.S. Patent 4,873,662) which it believed gave it patent rights on the use of hyperlink technology on the World Wide Web. The corresponding UK patent had already expired, but the US patent was valid until 2006. On 11 February 2002, BT began a court case relating to its claims in a US federal court against the Internet service provider Prodigy Communications Corporation. In the case British Telecommunications plc v. Prodigy, the United States District Court for the Southern District of New York ruled on 22 August 2002 that the BT patent was not applicable to web technology and granted Prodigy's request for summary judgment of non-infringement.
In early 2008 it was announced that BT had entered into a contract (along with Virgin Media and TalkTalk) with the spyware company Phorm (responsible under their 121Media guise for the Apropos rootkit) to intercept and analyse their users' click-stream data and sell the anonymised aggregate information as part of Phorm's OIX advertising service. The practice, known as "behavioural targeting" and condemned by critics as "data pimping", came under intense fire from various internet communities and other interested-parties who believe that the interception of data without the consent of users and web site owners is illegal under UK law (RIPA). At a more fundamental level, many have argued that the ISPs and Phorm have no right to sell a commodity (a user's data, and the copyrighted content of web sites) to which they have no claim of ownership. In response to questions about Phorm and the interception of data by the Webwise system Sir Tim Berners-Lee, credited as the creator of the World Wide Web protocol, indicated his disapproval of the concept and is quoted as saying of his data and web history:
It's mine – you can't have it. If you want to use it for something, then you have to negotiate with me. I have to agree, I have to understand what I'm getting in return. I myself feel that it is very important that my ISP supplies internet to my house like the water company supplies water to my house. It supplies connectivity with no strings attached. My ISP doesn't control which websites I go to, it doesn't monitor which websites I go to.— Sir Tim Berners-Lee, 2008
Beginning in 2010 the UK intelligence community investigated Huawei, the Chinese supplier of BT's new fibre infrastructure with increasing urgency after the United States, Canada and Australia prevented the company from operating in their countries. Although BT had notified the UK government in 2003 of Huawei's interest in their £10bn network upgrade contract, they did not raise the security implications as BT failed to explain that the Chinese company would have unfettered access to critical infrastructure. On 16 December 2012 the prime minister David Cameron was supplied with an in-depth report indicating that the intelligence services had very grave doubts regarding Huawei, and that UK governmental, military, and civilian privacy may have been under serious threat.
On 7 June 2013, British lawmakers concluded that BT should not have allowed Huawei access to the UK's communications network without ministerial oversight, saying they were 'deeply shocked' that BT did not inform government that they were allowing Huawei and ZTE, both with ties to the Chinese military, unfettered access to critical national systems. Furthermore, ministers discovered that the agency with the responsibility to ensure Chinese equipment and code was threat-free was entirely staffed by Huawei employees. Subsequently, parliamentarians confirmed that in case of an attack on the UK there was nothing that could be done to stop Chinese infiltration.
By 2016 Huawei had put measures in place to ensure the integrity of UK national security. Specifically their UK work is now overseen by a board that includes directors from GCHQ, the Cabinet Office and the Home Office.
ZTE, another Chinese company that supplies extensive network equipment and subscriber hardware used with BT ‘Infinity’, was also under scrutiny by parliament's intelligence and security committee after the US, Canada, Australia and the European Union declared the company a security risk.
In September 2012, BT entered into a $23 million deal with the US military to provide a key communications cable connecting RAF Croughton, a US military base on UK soil, with Camp Lemonnier, a large US base in Djibouti. Camp Lemonnier is used as a base for American drone attacks in Yemen and Somalia, and has been described by The Economist as "the most important base for drone operations outside the war zone of Afghanistan."
Human rights groups including Reprieve and Amnesty International have criticised the use of armed drones outside declared war zones. Evidence produced by The Bureau of Investigative Journalism and Stanford University's International Human Rights & Conflict Resolution Clinic suggest that drone strikes have caused substantial civilian casualties, and may be illegal under international law.
In 2013, BT was the subject of a complaint by Reprieve to the Department of Business, Innovation and Skills under the OECD Guidelines for Multinational Enterprises, following their refusal to explain whether or not their infrastructure was used to facilitate drone strikes. The subsequent refusal of this complaint was appealed in May 2014, on the basis that the UK National Contact Point's decision did not follow the OECD Guidelines. The issue of bias was also raised, due to the appointment of Lord Ian Livingston as government minister for the department which was processing the complaint: Livingston had occupied a senior position at BT when the cable between RAF Croughton and Camp Lemonnier was originally built.