BT has released Q3 results showing a decline in traditional revenues.
For the quarter ending December 31, BT reported a profit before taxation of GBP526 million. Net profit fell to GBP386 million from GBP445 million the year before.
While the former monopoly still controls over two-thirds of Britain’s residential telephone market, it has been hurt by cut-throat price competition, tight regulation and lower profits from calls from land lines to mobile phones, all of which bit into sales.
Revenue fell to GBP4.57 billion from GBP4.70 billion a year earlier. This included a 9% fall in revenue from traditional voice services, but this was offset by significant growth in its new wave services, which accounted for 18% of sales in the third quarter, equating to roughly GBP838 million.
BT Group has had to seek alternatives for its declining fixed-line operations, and over the past few years has sought to diversify revenue streams with what it calls new wave businesses such as broadband internet connections, voice over internet protocol, and handling the IT needs of corporate clients.
BT said it offers broadband to 85% of homes in the United Kingdom, and this should reach 100% coverage during 2005. BT is regaining market share for directory enquiries, but still making less profit, after the service was opened to competition last year.
The BT Global Services division, which was formerly known as BT Ignite, has been boosted by recent outsourcing contract wins with Abbey National, and the UK National Health Service. Judging by these contracts, BT is proving more successful in adding services capabilities than other telecom operators such as Deutsche Telekom and France Telecom, but its challenge will be to convince the increasingly cautious CIO community to risk handing over a larger section of their mission-critical technology to a single company.
This article is based on material originally published by ComputerWire
