BT publishes restructuring details; reports 3% revenue growth

2 Feb 2016

British fixed line incumbent BT has revealed what its chief executive Gavin Patterson called a ‘strong set of results with good numbers across the board’ for the quarter and nine months ended 31 December 2015.

In the third quarter of BT’s 2016 fiscal year it recorded a 3% year-on-year increase in revenue of GBP4.594 billion (USD6.97 billion), while the company reported that underlying revenue excluding transit was up 4.7% against the corresponding period a year earlier, noting that this was its best result for more than seven years. Meanwhile, EBITDA in 3Q16 totalled GBP1.613 billion, representing an increase of 3% against the same quarter last year, while adjusted profit before tax was GBP928 million, up 14% y-o-y.

In operational terms there were some notable figures too, with BT reporting its first consumer fixed line increase in over a decade as total consumer lines service increased by 6,000 to 9.528 million. Meanwhile, the company highlighted record Openreach fibre broadband net additions of 494,000 in the quarter under review to reach 5.492 million, with BT’s own retail fibre subscriber total standing at 3.689 million, up from 3.438 million at end-June 2015 and 2.744 million a year earlier. Although BT did not release an official figure for its mobile voice subscribers, it did note that the number of customers to have signed up for its ‘BT Mobile’ service had surpassed 300,000.

Alongside the release of its financial results BT also announced a new organisational structure that will take effect from April 2016. The decision to restructure follows the company’s acquisition of British mobile network operator EE, and following the reorganisation BT will comprise six lines of business, two of which will serve consumers, two focused on business and the public sector, and two providing wholesale services to other industry players. Notably the company has confirmed it will retain the EE brand, with that company serving as one of the consumer-facing lines of business. Meanwhile, the other retail division will be ‘Consumer’, which BT claims is the largest ISP in the UK, serving ten million households with a mix of superfast broadband, telephony, TV and mobile services.

New division ‘Business and Public Sector’ will serve businesses as well as the public sector in the UK and Ireland and will comprise the existing BT Business along with EE’s business division and those parts of BT Global Services that are UK focused. ‘Global Services’ will serve the communications needs of multinational companies and financial services organisations headquartered in the UK and across the world, with ‘Wholesale and Ventures’ meanwhile providing wholesale services to more than 1,400 communications providers; the latter will also reportedly be expanded to include EE’s MVNO business as well as some specialist businesses such as Fleet, Payphones and Directories. Finally, Openreach will remain unaffected by the reorganisation, and will continue to provide all companies with equal access to BT’s local access network in Great Britain. All six divisions will be supported by ‘Technology, Service and Operations’, which is currently responsible for BT’s ‘core’ networks in the UK and overseas, its IT platforms and its global Research and Development arm.

United Kingdom, BT Group (incl. Openreach), EE