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BT reveals cost saving achievements and investment strategy

BT Cost transformationBT has posted revenue of £5.949 billion (–1 percent), operating costs of £5.099 billion (–1 percent), EBITDA of £1.811 billion (–4 percent) and capital expenditure of £858 million in Q2 fiscal 2018.

BT has increased its investment in fixed and mobile networks by £44 million to £367 million. BT’s spending of £323 million was on customer driven investments. BT made investment of £150 million on systems and IT.

BT said it achieved run rate savings of £150 million from EE integration at the end of the first year. BT aims to achieve savings of £400 million by the end of the fourth year.

BT is generating savings from renegotiating terms with suppliers, in-sourcing a range of activities EE previously had with third parties across technology and business services, rationalising combined property estate and reducing head office and support employees.

BT aims to continue savings from April next year, when the telecom giant will be creating a single consumer line of business.

The management teams for BT Consumer and EE divisions are developing the integration plans for the combined business. The two businesses will report separately for the rest of this financial year.

BT Strategic focus areaBT has incurred costs of £104 million in the half year, removing over 1,500 job roles mainly from managerial and back office areas in Global Services, TSO and our Group Functions.

BT will be removing an additional 1,500 job roles in the second half of the year – targeting savings of £150 million this year. “We continue to expect these programs to cost £300 million, with a further 1,000 job roles to be removed next year,” BT said.

BT has created a new customer and enterprise transformation unit, bringing together Customer Experience, Transformation and major program delivery teams to create a new team focused on ensuring major restructuring and investment programs.

BT has also created a new Group Business Services unit bringing previously disparate shared service activity. This unit will aim to sustainably reduce the unit costs of our back office activities through leveraging economies of scale and simplifying processes.

Invest for growth

BT said its 4G coverage reached 86 percent of the UK’s landmass. BT will upgrade more than 600 sites by the end of financial year by converting 2G spectrum to provide airwaves into superfast 4G speeds.

The sites will power the next wave of mobile devices to hit the UK market, doubling the data upload speeds from the current maximum of 50Mbps to up to 100Mbps on more than 900 sites across the UK.

In line with Ofcom policy, BT would not be able to bid for spectrum in the 2.3GHz band, and would be restricted to no more than 85MHz in the 3.4GHz band.

Broadband

BT made a voluntary offer to deliver the Government’s goal for broadband access at a minimum speed of 10Mbps. This would involve an investment of an estimated £450 million to £600 million depending on the final technology solution.

BT has covered 27.1 million properties with its fibre broadband network. BT achieved 505,000 fibre broadband connections. BT aims to offer ultrafast broadband to 12 million homes and businesses in 2020.

BT said its G.fast pilot will reach 46 locations targeting one million premises by the end of 2017-18. BT’s ultrafast broadband technology, using FTTP and G.fast network, is available to around 770,000 homes and businesses.

BT is also planning for all-IP by 2025. All-IP brings significant benefits to all customers, such as single order fibre products, real time provision, and digital line quality.

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