BT CIO: “Economy not good for us and not good for our customers”

BT’s latest financial figures showed that the company is performing adequately amid the difficult economic conditions.

Profit was up three percent to €3.3 billion in the last six months boosted by a 46 percent rise in new retail broadband customers.

However, revenues were down three percent at €11.2 billion over the same period with the company’s wholesale division the worst hit – revenues there fell seven percent due to mobile termination rate reductions.

BT Group CIO Clive Selley reflected the topsy-turvy nature of the current business climate in an exclusive interview with European Communications.

First the bad: “I am worried about the slowdown in the global economy,” admitted Selley. “It’s not good for us and it’s not good for our customers.”

Evidence of this can be seen in BT’s retail division, where consumer revenue has decreased by four percent in the past six months as a result of lower calls and lines revenue.

Business revenue has also decreased – by five percent – due to what BT said was a reduced contribution from low-margin IT hardware and equipment sales, the ongoing decline in voice revenues and lower fixed to mobile call pricing.

On presenting the results earlier this month, CEO Ian Livingston said the company was focused on “offsetting the economic headwinds” through improved customer service and processes, better efficiency and investment in the future of the business.

Selley goes a step further, saying confidently: “Even in bad times we will be favoured by customers”.

The CIO said retail customers would be attracted to BT by being able to get value from bundling. In particular, BT is betting on delivering best-in-class broadband and is accelerating its €2.9 billion fibre rollout in the UK.

At least on one measure, the strategy appears to be paying off - ARPU increased by over €5 in the last quarter to €387 due to increased broadband penetration.

For enterprise customers, Selley said BT’s ability to make them more productive through services such as cloud is particularly attractive. Specifically, the fact that they can use an opex payment model of “pay per use” is something the CIO is excited about.

The other great white hope for BT is global expansion. It is focusing currently on two key areas: Asia-Pacific and Latin America.

“We are building capability and launching ‘European’ products there,” said Selley, who added that the company’s enterprise customers were driving its strategy.

“Our business customers are going to [these two markets] so we are too,” said the CIO. “We are compounding that by building new relationships with customers.”

In October, BT announced a series of investments aimed at doubling its business in key Latin American countries over the next three years.

The company reckons there is a €14 billion market opportunity in the region, which is expanding at seven percent a year.

An indepth interview with BT Group CIO Clive Selley will appear in the next issue of European Communications. Click here to ensure you receive your copy.

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