BT Retail adds 78,000 customers in last quarter
The BT Group is still suffering at the hands of its BT Global Service division, which while revenue increased still has a loss of some £124 million. The other large areas, which are BT Wholesale, Openreach and BT Retail still showed a profit in the face of static revenue or a small drop. The full detail can be found in an article on the BT website.
BT Retail saw a drop in revenue of some 2%, and this reduction in revenue was even after a net addition of 78,000 broadband customers to BT Total in the quarter. BT Retail has some 4.8million broadband customers, and its BT Vision product has grown to 433,000 customers. After some years of having speeds slower than the LLU operators the start of the roll-out of ADSL2+ via the BT Wholesale WBC product range may help it compete in areas where LLU is available.
The 1% revenue decline for BT Wholesale is down to a number of factors, including continued migrations to LLU networks, but to some extent is offset by an increase in revenue from managed network solutions. These network solutions are illustrated by the announcement of a 10 year contract with KCOM where BT Wholesale will manage KCOM's UK network operations.
Openreach showed no change in revenue, Ethernet price reductions and other effects being offset by an increase in revenue from growth in Wholesale Line Rental and LLU.
The next few years may prove interesting, since Openreach is investing in its fibre projects, which may see revenue decline further for BT Wholesale, but bring in more revenue for Openreach, particularly if LLU operators embrace the ability to connect directly to the Ethernet presentation from the FTTC and FTTP products at the exchange rather than use the BT Wholesale WBC product.
BT Retail is playing a dangerous game by promoting a no price rise upgrade for its switch from ADSL (up to 8Mbps) to ADSL2+ (up to 24Mbps), previous speed upgrades have shown that people often end up downloading and uploading more data with faster speeds, and while WBC products are cheaper to run than current IPStream products, usage does not have to increase much for the actual customer experience at peak times to actually get worse.