Home & Office

BT's new wave boosts the bottom line

The telecoms giant has increased turnover and appears to be making progress on broadband - but the biggest growth factor seems to be its 'new wave' of businesses
Written by Jo Best, Contributor
BT has published its half-year results -- and while the turnover for the company is looking static, the telco's 'new-wave' businesses are looking like the start performer.

BT's turnover across the company for the first six months of this year rose by one percent, to £9.2bn, excluding mobile termination rates, compared to the corresponding period last year. Turnover, excluding exceptionals, from the new-wave businesses -- mobile, broadband and ICT services - rose by 34 percent to £2bn.

The telco looks to be making progress on broadband, with 607,000 new users signing up in the second quarter, bringing total fat-pipe customer numbers to 3.3 million. Turnover from BT's broadband arm rose by 88 percent year-on-year.

The new wave as a whole is now managing to offset the decline BT is seeing from its traditional business -- landlines, for example -- which saw turnover fall by 6 percent. The company puts it down to regulation, competition, price cuts and consumers switching to higher tech options, including customers moved from dial-up to broadband.

However, BT's new-wave drive is having an impact on the company's bottom line in other ways. Second quarter operating costs rose by one percent, with higher new-wave marketing costs, higher subscriber acquisition costs and the cost of taking on extra staff to meet its ICT contract obligations.

With one major acquisition in the bag - the recent purchase of Infonet for £520m -- will the promising growth in new wave businesses tempt BT into buying again? Ovum Holway analyst Phil Codling hasn't ruled it out.

"Frankly, we'd be surprised if the company emerged as a suitor for a business of the scale and complexity of, say, Capgemini. But we'd also expect BT to bolster its [services] growth engine with smaller acquisitions that help to sustain its impressive momentum. For BT, [services] just keep getting more and more important," he said in a research note.

In other news, BT is advancing its broadband and mobility efforts with a series of roaming agreements with members of the Wireless Broadband Alliance, giving BT customers access to another 20,000 hot spots in Europe, the US and Asia.

BT already has roaming agreements with T-Mobile and The Cloud, among others.

Editorial standards