UK telecoms group BT has released a strong set of financial results.
In the fourth quarter to March 31, net income rose 34.8% to GBP570 million on revenue 1.7% higher at GBP4.87 billion. For the year, net income increased 20.3% to GBP2.3 billion.
Unlike its European counterparts, three years ago BT fell victim to the prevailing financial wisdom of the time and spun out its mobile arm. This deprived it of a growing revenue stream that it could have used to offset the 10% decline to GBP8 billion in its voice services for this year.
The company has no alternative but to throw its energies into what it terms as new wave areas such as information and communications technology (ICT) solutions, broadband, mobility and managed services.
Revenue from these areas rose by 32% last year and now represents nearly a quarter of its business. BT has experienced a boom as broadband DSL connections doubled in the year to 5 million and ICT order intake grew to more than GBP7 billion, ensuring it will be on a steep growth curve in the future.
BT has always set an example that the rest of Europe’s telecoms incumbents tended to follow. It was the first to be privatized, the first to build up unsustainable levels of debt and the first to bring in a new CEO with a better idea of how the business should be run.
With its GBP10 billion 21st Century Network (21CN) project, which aims to migrate its entire consumer, enterprise and wholesale customer base to an IP network by 2008, the company is again setting an example to its peers.
Chief executive Ben Verwaayen is not making specific forecasts for the current year but it clear he expects growth to continue. By pleasing both the financial community and the IT industry as a whole, he is showing how a once boring carrier can be transformed into a force that can lead the industry.
