CEO’s Business Review

Chairman’s Foreword

2020 was a year we will never forget; it was a year which challenged all of us – businesses, governments, families and individuals – nothing was left untouched by the effects of COVID-19.

Perhaps the defining theme for the year was actually how each one of us responded and adapted to those very serious challenges.

There is no doubt that it has been a difficult year for JT – but one which I know we have emerged from stronger, and optimistic about delivering future success for our business, for our customers and for the communities we serve.

One reason for that confidence is our base in the Channel Islands, where the local governments responded to the emerging pandemic swiftly, decisively, and effectively – keeping our communities safe and minimising economic impact – such as at one point, paying up to 80% of the salaries for the private-sector employees who were unable to work.

We are very proud to have been able to provide the infrastructure needed to make life a little easier; Jersey was one of the better prepared countries when almost overnight the community was told to ‘work from home’ and tight restrictions prevented face-to-face socialising and travel. Our fibre network stepped up to the challenge, and we swiftly moved to provide free local calls, removed charges for exceeding data limits and increased bandwidth to make it as simple as possible for everyone to make that transition.

Whatever permanent change this pandemic has created in the way we live, learn and work in the future, we will be there to support our people, our customers and our communities.

For JT, 2020 was about playing a critical role in supporting those communities, delivering the connectivity needed to make the transition from working in the office and learning in schools, to working and being educated at home and in keeping people entertained and in touch when they couldn’t meet up.

Phil Male Chairman

Since this was 2020 though, nothing went 100% as planned. Having just successfully enabled that mass cultural shift to home-working…on a Sunday night in the middle of July, our network failed.

The reasons for that, and how we reacted to them, have been well-documented; but I am grateful for this opportunity to add my personal thanks to the dedicated team at JT who worked so hard, in very difficult circumstances throughout the night, to get the systems back up and working as quickly as possible, and to offer my apologies to everyone impacted by that unprecedented incident.

We have also faced challenges this year in delivering the ‘999’ service to an acceptable level – a service that JT has looked after in Jersey for more than a century. The detailed review we conducted and the independent JCRA investigation have been genuinely helpful in establishing the exact causes of the problems and resolving them, as well as determining how the service should be developed both for JT and the other operators.

Again, the hallmark of last year was not that a serious problem arose; but that we proved how we could handle it in difficult circumstances, while our entire workforce was working remotely, and that we could learn from the experience, giving us greater confidence for the future.

That idea - using our experience in 2020 to build back more strongly - is reflected in the additional work we have undertaken to further develop the ‘999’ service. As you will see in our CEO, Graeme Millar’s Business Review we are working with the Government to use modern technology to improve the service, making it more targeted by enabling the emergency services to quickly locate someone in need of their assistance.

But 2020 has not simply challenged us all with a global pandemic, it has also demonstrated just how political decisions around the world have consequences in our local markets. As a telecoms company our business is connectivity, and that means we operate on a global stage. 2020 was the year the UK left the European Union and we saw tension in East-West trade conditions, especially in the technology sector.

For JT, supporting the islands is always our priority, so we took a prudent approach and re-visited our costs, looked at preserving cash, and reconsidered our business profile in light of the emerging trading conditions.

eight years, we felt the time was right for new owners, who specialise in customer experience solutions, to take it forward, and we wish Worldstone every success in the future.

We also withdrew from our activities in the international voice trading markets. With more turbulent global economic conditions ahead and an ever-increasing amount of data being carried internationally this was an area of our business that had simply become unattractive, and which offered very little opportunity for growth. The impact on our revenues this year has been significant (a little over £40m), but because of the low margin nature of voice services, there was minimal impact on our profits.

Looking ahead 5G will be key in delivering the level of connectivity which future communities will rely on. We have been running successful trials and have committed to use only use vendors preferred by the UK to build our network. As part of that commitment, we will also gradually remove equipment which is not supplied by preferred vendors from our existing networks by 2027.

The rapidly increasing global need to use digital connectivity for business-critical data provides real opportunities for JT. Our ability to innovate and grow from our Jersey base means we can develop high value niche services in global off-island markets. We have an extensive portfolio of services that operate across the world, some of which are rapidly maturing such as our IoT (Internet of Things) business, and some of which we continue to nurture such as our Fraud Protection services. We will continue to invest and develop new ideas – embracing the opportunities that emerging digital and software-based services offer us and the unique world-leading position we have established with our advanced infrastructure investments over the last few years.

At JT, our commitment to always looking forward starts at the top, and in 2020 we made some changes as part of our programme of constantly refreshing the expertise at Board level. John Kent retired as our CFO and Sean Collins retired as Chairman of our Audit and Risk Committee. Both John and Sean have served JT well over the last few years and I would like to record my thanks for their service, their herculean efforts in helping JT transition to IFRS accounting standards, and their invaluable contribution to the Board – they will be sorely missed.

At the same time, we welcome three new faces to our Board. Hélène Narcy has joined as our new CFO, and Mark Shuttleworth and Angus Flett have joined the Board as Non-Executive Directors. All three have reached the top of their chosen fields, and have extensive experience both in the communications sector, and in corporate governance. They bring fresh new ideas to JT and I’m thoroughly looking forward to working with them to take JT forward to new successes.

These appointments are an example of how, despite the short-term challenges of 2020, we have continued to fix our planning horizon on the long-term – in all aspects of our business. It is for this reason that this year we have pulled together all our various programmes that managed the social and environmental impact of our business into one ambitious 10-year Sustainability Strategy. We fully support Jersey’s 2030 carbon neutrality targets, and as a corporate citizen of the islands we have a moral obligation to do everything we can to build a sustainable future for us all.

We’ll be doing that not just within our own business but also helping others to do the same. At a very simple level, technology, such as fibre broadband, will be critical in helping to reduce the need for unnecessary travel, or in allowing more of our technology hardware, that is ultimately connected to our home routers, to be virtualised in our Data Centres as software applications, reducing the need to produce so many high-energy individual devices.

Looking back on a year like 2020, which ‘whipped up’ considerable headwinds for all of us, it is seductive to see only the negatives, and characterise it as simply a ‘bad year.’ That’s not how I see it. No one escaped problems in 2020, no business, government or family has come through it without a story to tell. We have all suffered, in so many different ways.

Ultimately, what is the point of telling those stories, as JT does here, in this annual progress report? For me, the point is to share our experiences, to be open about the common challenges and difficulties we have all faced – and in so doing, to help both ourselves and others to become stronger for the future.

That is why at the end of a year which none of us will ever forget, we can look positively on the collective strength we have discovered; and which we can now build on again, as we head through 2021.

I wish everyone well, be safe, and be assured you can count on JT’s continuing efforts to drive positive, forward momentum in our business, our people and in support of our communities.

CEO’s Business Review

Sitting down to write this is a good opportunity to reflect on a year which has undoubtedly brought significant challenges - but which has also planted the seeds for optimism in the future ahead.

One of those is the way that our local community has pulled together, and I couldn’t be prouder of JT’s pivotal role in helping that to happen. To briefly recap, we reduced costs for our customers wherever possible, and doubled broadband speeds to make it easier for people to work, learn and be entertained at home.

Essentially, our role is to keep our customers connected, and with that in mind, once the next set of official speed results are in, we fully expect Jersey to take the number one spot in the world for broadband speeds, after reaching third place in 2019 and then second in 2020. I want to once again thank Islanders and the Government of Jersey (GoJ) for standing with us on this project, which began over a decade ago.

Graeme Millar

CEO

Our strong relationship with the GoJ is continuing in two important ways. Firstly, JT has been appointed by the Government to work with our partners ITC, sharing a key role in protecting government healthcare services from cyber threats and defending their critical systems throughout the current crisis and beyond.

“We have the secondfastest connectivity in the world and we are fibred throughout the Island by JT. So when it came down to having to work from a distance all that work that was put in by JT over the last few years really helped”.

Assistant Treasury Minister Lindsay Ash, Jersey Evening Post, 30 January 2021

Secondly, with the trial of RapidSOS, we became the first jurisdiction in Europe to deploy digital upgrades to a 999 ‘emergency services’ system, providing accurate location data for the caller in trouble, and so making sure help can reach them even more swiftly.

In 2020, we also further strengthened our relationship with the States of Guernsey, having been selected by their chosen IT provider, Agilisys, to deliver the very best technology solutions, as they embark on an ambitious 10-year program to modernise Guernsey’s IT systems, and transform and digitise their public services.

As the COVID-19 pandemic swept across the world, many pointed out that although we must deal with the immediate problems it caused, we mustn’t lose sight of longer-term problems. Whilst we face this global pandemic, and its economic shock, the other big policy challenge of our lifetime - the climate emergency - has not gone away.

Much of the groundwork for how our industry can provide the technological solutions to many of the world’s problems has been done. For our part, JT is forging ahead with helping people make their homes smarter and capable of making their living space more sustainable. The advent of automation for ‘smart’ homes and businesses has been brought about by the advancements in connectivity and made possible by our world-class, full-fibre network.

We have also created business solutions that are flexible enough to be adapted for use in our critical healthcare services.

One of those solutions was our new JT SD-WAN designed for multi-site workplaces, connecting everyone across various locations via a dedicated secure link to their corporate network and systems. The Government of Jersey’s Digital Health Team asked JT to develop a solution to help ensure essential patient diagnosis was not hindered in any way due to health professionals working remotely. The JT solution was flexible and adaptable enough to be deployed into the homes of Consultant Radiologists. Over that secure link, they could instantly review scans and x-rays live as emergencies happened, without breaching patient confidentiality or compromising their safety, relaying crucial advice to the team at the hospital.

Applying the technology in this way had never been done before, and in some cases, it meant they could give guidance to surgeons while they had patients on the operating table, remotely being in attendance to support and complete the medical team. That’s the kind of difference that technology can make, and we were proud to be a part of that.

2020 was also a year where people took the opportunity to get some exercise, enjoy the great weather, and go out and explore; many Islanders made use of the now familiar luminous yellow and black EVie bikes.

In each of those bikes, and in EVie’s fleet of electric cars and vans, there is a JT SIM that sends data back to the company’s HQ; it gives them real-time information on where their bikes and vehicles are, and what their battery status is. Thanks to our partnership with EVie, greener transport solutions are beginning to happen. It’s an example of the many ways JT is contributing to our community.