BT Q2 2011 revenue down 2% to 4.89 billion pounds; profit up 15%

BT posted a 2 percent decrease in revenue at 4.89 billion  pounds in Q2 2011 compared with 4.97 billion pounds in Q2 2010.


Decline in BT Retail and BT Wholesale revenues contributed to the marginal decrease in revenue.


PBT of BT rose to 570 million pounds in Q2 2011 from 496 million pounds in Q2 2010, showing 15 percent growth.


BT Global revenue grew to  2.01 billion pounds in Q2 2011 from 1.99 billion pounds, growing at 1 percent.


BT Retail revenue decreased 3 percent to 1.85 billion pounds from 1.91 billion pounds.


BT Wholesale business also posted 7 percent decrease in revenue at 982 million pounds in Q2 2011 from 1,051million pounds in Q2 2010.


The Openreach of BT grew 4 percent to 1.28 billion pounds from 1.23 billion pounds.


Capital expenditure of the company increased 7 percent to 652 million pounds.


We have increased cash flow, profits and underlying revenue in the quarter. This progress has been supplemented with positive operational performances in most of our businesses. We achieved a market leading 63 percent share of broadband net additions and another quarter of growth in fixed lines,” said Ian Livingston, chief executive, BT.


BT expects to continue to offset the economic headwinds through improved customer service and processes, better efficiency, and investment in the future of the business.  This strategy and our financial results allow us to invest when others are merely talking about it.  


The UK operator is accelerating our fibre roll-out programme to cover two-thirds of the UK by the end of 2014 one year earlier than planned and creating 520 new jobs. With the already announced government support, we believe there is the potential for fibre-based services to reach more than 90 percent of the UK within a few years thereafter.


We are also investing across the world and have announced a programme to double our business in key Latin American countries in addition to our expansion in the Asia Pacific region announced last year,” Livingston added.


BT added 166,000 retail broadband customers, up 46 percent over last year, representing 63 percent of the DSL and LLU market net additions of 263,000. BT increased our lead as the UK’s number one broadband retailer with a customer base of around 6 million at 30 September 2011. Its customer base currently stands at over 300,000, having more than doubled in the last six months.



BT increased its Global revenue by 1 percent reflecting an improved operational performance, contract milestones including the acceleration of around 60 million pounds of milestones from the second half of the year, and a 31 million pounds positive impact from foreign exchange movements offset by lower transit revenue, which declined by 59 million pounds, and a 10 million pounds negative impact from disposals.



Contracts signed in the quarter included a contract with Best Buy Europe to provide a wide area network transformation to 820 stores and a contract with CLSA Asia Pacific Markets, Asian brokerage and investment group, to provide voice, data and trading systems solutions across 14 countries. BT expanded its contractual relationship with Novartis adding new services and connecting new global locations. BT signed a networked IT services contract in Australia’s health sector in partnership with Serco. 


BT announced investments aimed at doubling its business in key Latin American countries. By recruiting 250 new staff, increasing its professional services capabilities, opening new centres of excellence and implementing a wide range of network and customer service improvements, BT aims to better support global customers investing in this region and help large Latin American companies expand globally.



Consumer revenue decreased 4 percent reflecting lower calls and lines revenue partially offset by growth in broadband revenue. Consumer ARPU increased by  5 pounds in the quarter to 335 pounds largely due to the increased penetration of broadband in our customer base. BT Vision net additions were the highest for more than two years at 41,000. 



Business revenue decreased by 5 percent due to a reduced contribution from low-margin IT hardware and equipment sales and the ongoing decline in voice revenues as well as a full quarter’s impact of lower fixed to mobile call pricing. 



BT Enterprises revenue, excluding foreign exchange movements, was broadly flat as growth in BT Conferencing and BT Expedite was offset by a decline in BT Redcare & Payphones.



BT’s wholesale revenue declined 7 percent reflecting a reduction in transit revenue of  68 million pounds principally driven by mobile termination rate reductions.


BT signed a five-year contract with O2 for our IP Voice Services and a framework agreement with Colt Group to resell BT’s worldwide media network capability. 



BT continued to upgrade customers to Wholesale Broadband Connect (WBC), next generation copper broadband service. During the quarter 145 new exchanges were enabled, increasing the total of WBC-enabled exchanges to more than 1,450, serving more than 70 percent of UK premises. BT grew its fixed Ethernet base with the number of lines more than doubling over the prior year. Operational delivery of its Mobile Ethernet Access Services for mobile operators continued to strengthen, with more than 1,000 sites added, increasing the total number of sites to more than 11,000. 



In partnership with Everything Everywhere the company started a 4G field trial in Cornwall where 200 end-users are now testing the application of LTE technology as a shared fixed and mobile platform and a potential infill solution for broadband -not spots’ in rural areas. The field trial is the first live end user trial of LTE technology in the UK and the world’s first trial of LTE as a shared fixed and mobile platform solution.



Revenue increased by 4 percent. External revenue was up 5 percent due to growth in Ethernet and ongoing migration to LLU. Internal revenue was up 3 percent due to growth in Ethernet and increased fibre revenue. 



Our overall copper line base increased by 11,000 and has now grown in each of the last four quarters as customers recognize the advantages of fixed-line broadband.


By Team

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