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BT Group results for the third quarter published
Thursday 11 February 2010 14:16:16 by Andrew Ferguson

The BT Group has published its latest set of financial results, which cover the nine months up to the 31st December 2009.

"These results show that we are making progress. There is still a lot more to be done but our commitment to improved customer service and cost transformation is starting to deliver results and freeing up resources to invest in our future. In particular, we are one of Europe’s largest investors in super-fast fibre-based broadband and this will bring huge benefits to our customers and the UK."

Ian Livingston, Chief Executive, commenting on the results,

The various parts of the BT Group that most directly affect broadband being Openreach, Wholesale and Retail all appear to have had a tough time, or as the results suggest 'challenging market conditions', overall group revenue was down some 4%.

BT Retail saw the trend of reducing calls and line revenue continue, some of this probably from people switching to other call providers and line rental deals, but another factor is the increasing amount of fixed cost call packages available. BT Vision had some 451,000 customers at the end of December 2009, and the results highlight the Project Canvas project as well as the possibility of wholesale access to Sky Sports and Movies which may boost the customer numbers for BT Vision. Retail had 102,000 net additions in the quarter taking its number of broadband customers to over 5 million.

BT Wholesale who provide the IPStream and WBC services that people not using unbundled broadband services are reliant on showed an 8% decline in revenue, which was attributed to reductions in mobile termination rates (£66m). Wholesale Broadband Connect (the 21CN broadband product range) now covers some 50% of UK homes, and is expected to reach 75% by Spring 2011. The new FTTC/P products will utilise WBC based backhaul unless a provider takes an Ethernet handover at the exchange (which is what we expect most LLU providers to do). Ethernet products are available from some 780 nodes which is three times as many compared to a year ago.

Openreach saw a fairly small reduction in revenue of 3%, which is apparently due to reduced pricing of Ethernet products, and the depression in the housing market. This set of results is too early to see what impact the FTTC and FTTP products will have, but once more providers are offering these products we may see the revenue for Openreach increase.

The largest challenge in the next couple of years for the BT Group from our perspective is that while it is spending a large sum of money on getting better broadband to a good chunk of the UK, is what to do about reaching the other 50 to 60% of the UK, while satisfying its need to look after shareholders. Present and possible future governments are vague on precise detail and if the political landscape becomes unsettled, investment decisions may be harder to make and be deferred with the risk that in the longer term UK industry, both traditional and the young e-economy, may suffer.

The recent offering of duct sharing, is an interesting move, that could help with getting better networks put into the ground, but to work properly will need some providers who currently rely on Openreach assets to reach homes and businesses to expand into the local loop arena themselves.


Posted by cyberdoyle over 7 years ago
Which part of BT (or is it all three parts of BT) is responsible for finding the £9billion pension deficit? and why is it persisting in rolling out obsolete ADSL2+ when it should be rolling out fibre? Is that not the wrong way to increase profits? I agree, government dithering means the eEconomy is gonna take a hit if someone doesn't sort BT out soon.
Posted by themanstan over 7 years ago
CB £9B is a legacy from being a civil service/industry with generous pension schemes that were all guaranteed by the tax payer. The tax payer still has a £3B liability if I recall correctly. With almost 400,000 people in the pension scheme, BT has had to push an extra £0.5B into the scheme every year. Looks like this isn't enough and they need to cough up more. So less money available for investment and shareholder alike.
Posted by themanstan over 7 years ago
My goof BBC reckons liability exposure to us tax payers is 75%... ouch!
Posted by otester over 7 years ago

If we can afford reasonless wars, we can do this.

Since we lost our manufacturing centre (like USA), infrastructure has become a decaying, defunct, pile of ****.
Posted by tommy45 over 7 years ago
BT interested in broadband? not a chance,

they should open their ducts up now, so not only can other isp's put their own networks in, but also fault find, instead of having to use bt sfi, that likes to charge extortionate prices if it don't find a fault?, they need to get real
Posted by Somerset over 7 years ago
What will duct access cost?
Posted by timmay over 7 years ago
Well BT is screwed...
Posted by andrew (Favicon staff member) over 7 years ago
The SFI charging may well seem high, but then how many qualified PSTN/Fibre fault finding engineers are there in the country?

How many of these understand all the nuances of the DSL variants?

Next step with local loop, and even more likely if loop is in a new company, is 'insurance' just like you get bombarded with for boilers, water, electricity.
Posted by TaRkADaHl over 7 years ago
Cyberdoyle... Fibre uses the ADSL2+ network as the old 20CN network cannot cope with PPPoE. Until 21CN is in the exchange you cannot roll out Fibre.
Posted by GMAN99 over 7 years ago
9Bill.... wow, don't expect them to take any cash risks with an overhead like that
Posted by ElBobbo over 7 years ago
andrew - How often do the SFI engineers actually solve the problem on the first visit? What's the average number of visits to solve a problem where it's not just thrown back to BT because they said they fixed it and they haven't. How often do people check the credentials of the SFI engineers? I suspect the "engineers" sent are not always as qualified as you suggest. I've certainly had an "SFI" visit where he didn't know his ass from his head.
Posted by BobtheSkutter over 7 years ago
The pension deficit is a strange thing. This is only a problem if BT were to cease trading tomorrow and everyone working at BT took their pension.
Is that likely to happen? No
Also apparently if you used an average method of calculations the deficit would be £3b
Posted by chrysalis over 7 years ago
I wonder if the government offered to take on 100% pension liability in return for a proper FTTP/C rollout would be workable for BT.

By proper I mean every city having FTTP by 2012 and everywhere else FTTC by 2013.
Posted by TaRkADaHl over 7 years ago
chrysalis... I want whatever you are smoking... FTTP by 2012... you must be as high as a kite...
Posted by chrysalis over 7 years ago
whenever I look at other rollouts worldwide they are completed in a 2-3 year span, so doesnt sound too unrealistic to me. Even 4-5 years would be an improvement over the 12 year projections I have been hearing.
Posted by Somerset over 7 years ago
chrysalis - do you have some examples?
Posted by GMAN99 over 7 years ago
2-3 years to rollout FTTH across a whole country? Must be small countries.
Posted by planetf1 over 7 years ago
IMO Orange (and any of the co's) are behaving irresponsibly if they don't apply a sensible credit check and validation to accounts.

It's so easy to use data abroad with current technology - indeed it might be prudent for everyone to default to having data disabled when roaming abroad (I do this, fortunately 3UK let you control this yourself on the website, still like a limit though)

Any credit card company will quickly block a transaction if it's outside a normal spending pattern in case of fraud. It's about time the mobile cos did the same.

irresponsible IMO.
Posted by planetf1 over 7 years ago
Sorry wrong post
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