BT to lose 5,000 managers as profits slip

UK incumbent telco BT said Thursday it expects to lose around 5,000 management positions this year under its restructuring programme.

The group’s transformation programme led to costs of £182m during the quarter to end September 30, principally relating to the jobs cuts. This triggered a 31 per cent drop in profits during the quarter, with profit after specific items but before taxation dropping to £435m from £629m in the same period a year ago.

But with this exception, results were fairly solid. Revenues for the quarter increased 3 per cent year on year to £5bn, with growth in new wave revenue continuing and hitting £1.9bn during the quarter.

New wave revenue is mainly generated from networked IT services and broadband and accounted for 38 per cent of the group’s revenue.

BT had 11.7 million wholesale broadband connections, including DSL and LLU (unbundled) at the end of September. There were 479,000 new connections in the second quarter with BT’s retail share of those net additions at 178,000 or 37 per cent. BT Retail’s total broadband customer base was 4.074 million or 35 per cent of the DSL and LLU total customer base.

Ben Verwaayen, BT chief executive, announced the restructuring plan earlier this year, which will see “BT advance from a 20th century hardware-based company to a 21st century software-based services company.”

Meanwhile, the BT Vision IPTV offering is now available for customers to self install, bringing the connection fee down from £90 to £30.

The self install option includes a pair of Comtrend Powerline Adaptors, so users can set the box up and use the home electricity network to connect to the circuit.