UK telco BT has reported revenue of £11.588 billion for its second quarter, down 2 per cent and adjusted revenue of £11.624 billion, down 1 per cent as growth in its consumer business was offset by regulated price reductions in its Openreach infrastructure subsidiary and declines in its enterprise businesses.
Operationally, the telco reported that nearly 2 million total ultrafast premises had been passed, with Openreach currently building Fibre to the Premise to some 13,000 premises per week.
“We continued to generate positive momentum in the second quarter resulting in encouraging results for the half year,” commented Gavin Patterson, Chief Executive. “We are successfully delivering against the core pillars of our strategy with improved customer experience metrics, accelerating ultrafast deployment and positive progress towards transforming our operating model.”
“In Consumer, we continue to see strong sales of our converged product, BT Plus, and have seen good mobile sales following new handset launches. Last month EE demonstrated 5G capability from a live site in Canary Wharf. We have maintained momentum in our enterprise businesses despite legacy product declines.”
“On 1 October we completed the transfer of 31,000 employees into Openreach, a key part of fulfilling our DCR commitments. Openreach has signed up the majority of its major and a number of its smaller communications providers to its new volume related discounts which should increase average broadband speeds across the UK. We are making positive progress on the key enablers to ensure that we can secure a fair return on our FTTP investment, and are ready to expand the FTTP programme up to and beyond 10 million premises if the conditions are right.”
“Our strategy is delivering, with benefits evident from the steps we’ve been taking to simplify and strengthen the business and improve efficiency. Despite increasingly competitive fixed, mobile and networking markets and continued declines in legacy products there is no change in our overall outlook for the full year. Based on current trading, we expect EBITDA to be in the upper half of our £7.3 – £7.4 billion range.”
According to BT, innovation remains a key element of its strategy and it has continued to improve its BT Sport proposition, including holding its first pay per view event in the quarter, with EE customers can now use the BT Sport App on their TV via casting.
BT also agreed a long term extension to its content supply agreement with Sky. Audience figures continue to grow across TV and digital platforms. The UEFA Champions League group stages saw a 46 per cent increase in viewing figures compared to the same matches last season. BT Sport’s current Premier League average audience is up 9 per cent year on year with a new record for digital platform only viewing.
According to technology, media and telco analyst Paolo Pescatore, the results reflect worrying times for BT, with more turmoil to come and incoming CEO Philip Jansen having to make some tough decisions across the board and with all of BT’s business segments.
“Despite its strong network assets, BT is struggling to stand out in a competitive landscape. This will only proliferate with the arrival of Comcast (through Sky) and potential others in the future as well,” he suggested.
“The consumer segment continues to stand out. BT Plus has made a modest start. However, greater focus needs to be placed on retention and upselling into existing base. And more importantly, ensuring costs do not spiral out of control due to the rollout of 5G and fibre broadband connections. No easy feat while trying to renew and secure key sports rights.”
“Its rivals are strengthening their respective positions in content which might prove to be a tough end to the calendar year for BT.”