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.
staff member)
about 1 year 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.