KCOM Regulatory News (KCOM)

Maintaining revenue in our enterprise segment while network-based revenue declines

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As technology develops and methods of communication continue to evolve, our business is moving away from delivering network-based services to more complex communication solutions and cloud-based services. There is a risk, during the period of transition from old to new technologies, that revenue from legacy activities may decline faster than revenue from new services grows.

We are very clear about our strategy and focus and we believe we are uniquely positioned in the market to provide our customers with new and more efficient ways of communicating which will in turn lead to significant growth in the enterprise segment, to offset the decline of the legacy revenue.

Substitute technologies entering the consumer market

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Much of our consumer business is currently based on the provision of services over a fixed-line network. If substitute technologies were developed to the extent where similar services could be provided without the use of a fixed-line network then this would clearly present a competitive threat to the consumer part of our business.

We look continually to improve the services that we are providing to our consumers and to provide a speed and quality of service that would not be achievable over a wireless network. We also provide bundles of products and services that offer our consumers value for money and which would provide a clear alternative to substitute technologies, should one enter the market.

Upgrading of our network equipment

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The equipment used to run our network in Hull and East Yorkshire, and to provide some of our national network-based services, requires upgrading as demand for broadband and cloud-based services continues to increase extremely quickly.

We have clear plans to invest in the network to mitigate the risk of service failure from obsolete equipment. At the same time we continue to deploy our superfast fibre-based broadband in Hull and East Yorkshire which provides market-leading broadband speeds and will be available to approximately 150,000 properties by the end of December 2017.

Accuracy, security and confidentiality of customer data

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It is extremely important to us, and to our customers, that customer data is kept secure and confidential, as well as accurate. The risks relating to data remain high as a result of the volume of external attacks seen across all industries.

We have clear and comprehensive policies in place and have run an online awareness programme, mandatory for all employees, to ensure awareness and understanding. We have a virtual team focused on data governance which reviews the accuracy of data and oversees data cleansing activities and controls around data to reduce the risk of inaccuracy. We also have forums in place to enable sharing of best practise across the business.

Customer service and delivery

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Our aim is to provide exceptional service wherever we can. The risk of not achieving this is therefore a key risk for the business.

We are aware that customer service in Hull and East Yorkshire has suffered during the year in relation to call waiting times and we are specifically working to address this through implementing new technology in our call centres, retraining out people and reviewing and revising our processes to ensure the optimal experience whenever customers contact us.

Security and resilience of our networks and IT systems

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Much reliance is placed on the networks and IT systems we use, both within our business and in the services we provide to our customers. It is therefore essential that we have secure and resilient systems and networks in place.

This year we have appointed a Head of Cyber Risk to focus specifically on IT and network security and resilience and to ensure there is consistent oversight of the work we are doing in this area across the business. We continue to hold the ISO 27001 Information Security Management standard and various other security-related standards that are required by our customers, as well as the ISO 22301 Business Continuity standard.