BT's revenue falls 5% as it starts SME on-demand fibre service

BT has reported a 5% drop in revenue for Q3 2011 to £4.77bn as it pushes IT services and business fibre broadband.

BT has reported a 5% drop in revenue for its third quarter 2011 to £4.77bn as it pushes IT services and business fibre broadband.

For the quarter ended 31 December 2011, BT’s Global Services business dropped 4%, compared with the same quarter in 2010, although BT signed contracts with Sainsbury’s and Standard Life, as well as Staples, Eni Group, Bristol-Myers Squibb and Deutsche Post DHL.

“We also signed two major contracts with the European Parliament," it said in its financial statement. "We are seeing the benefits from our investments in Asia Pacific and Latin America, where the combined order intake so far this year is up over 50%.”

Commenting on the company’s broadband business, CEO Ian Livingston (pictured), said: “In the UK, our fibre roll-out has accelerated, bringing superfast broadband within reach of more than seven million homes and businesses, and we remain the number one broadband retailer, with more than six million customers. Our fixed-line base has now grown for the past five quarters and our active consumer line loss is at its lowest for five years.”

David Molony, principal analyst at Ovum, said: “BT’s financials show how much of a challenge it faces in transforming its business, and why it's so important for BT to continue to change its service mix. Openreach is delivering good results on the back of the company's fibre investment. However, the main focus must remain on BT Retail and BT Global Services. BT must keep innovating to deliver faster broadband speeds and more enticing bundles for consumers, as well as developing Global Services' capabilities through cloud services, professional services and further regional investment."

The company is now rolling out FTTP (fibre to the premises) on-demand products for areas of the UK where BT has already deployed its FTTC (fibre to the cabinet). The service, which was piloted in  St Agnes, Cornwall, offers smaller businesses speeds of up to 300Mbps. The service offers guaranteed bandwidth.

While the service may attract businesses due to the on-demand payment structure of the service, some experts predict that set-up fees for FTTP may be as high as £1,000.

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