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BT bounces back in strong first quarter

After a run of bad news, there were some bright spots in BT’s first quarter financial results

First quarter earnings at BT were up 1% to £1.8bn thanks to a combination of cost-savings resulting from its deep restructuring, and stronger handset margins in the consumer business (EE), giving the markets the first indication that things might be starting to turn around after a string of blows that ultimately claimed the job of CEO Gavin Patterson.

With BT battered by the continuing fallout from the 2017 corruption scandal at its Italian business and other issues including ongoing problems at BT Global Services and a widening deficit in the organisation’s pension fund, Patterson was forced out to avert a shareholder revolt in June, just weeks after announcing a massive restructuring programme at the start of the quarter.

While it is far too early to speculate that Patterson’s last acts as CEO have paid off for BT – and reported revenues of £5.72bn were down 2% year-on-year due to regulated price reductions at infrastructure business Openreach and further declines on the enterprise side – the outgoing boss struck a positive note.

“We’ve made a good start to the year,” said Patterson. “We are making positive progress against our strategy.”

“Our customer experience metrics continue to improve and we have seen the successful launch of new converged products including BT Plus, our first Consumer converged offering and 4G Assure, for business customers.

“Initiatives to transform our operating model have seen a gross reduction in circa 900 roles across the Group and improved cost performance,” he said.

“EE continues to maintain its network leadership and will switch on the UK’s first live 5G network trial in October. Openreach continues its FTTP network deployment and is currently building to circa 10,000 premises per week.”

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New Openreach wholesale pricing will incentivise communications providers to encourage more of their customers onto better services and ultimately move the vast majority of Britain’s homes and businesses onto superfast and ultrafast platforms.

“We welcome the initial outcome of DCMS’ Future Telecoms Infrastructure Review and Ofcom’s approach to future regulation and look forward to further engagement with all our key stakeholders to ensure greater clarity, certainty and support as we look to realise our broader investment ambitions.”

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