BT 'on track' to growth as it agrees Microsoft deal

BT CEO Philip jansen
(Image credit: BT)

BT says it is firmly on the path to growth despite a drop in first quarter revenues, pointing to momentum in its modernisation and network building programmes as well as an expanded partnership with Microsoft that should strengthen its business offering.

Revenues fell by 3% to £5.1bn, while pre-tax profits declined by 4% to £536 million despite a 3% increase in profitability.

As has been the case in recent times, growth in consumer and wholesale income was offset by challenging market conditions in its public sector, enterprise, and global divisions.

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However, BT believes its long-term restructure is already showing signs of progress, while the company has increased its full fibre rollout target to 25 million properties by 2026 and its 5G coverage goal to 90% of the UK landmass by 2028.

So far, Openreach has hooked up five million homes and businesses to full fibre with one million subscriptions across all communications service providers (CSPs). Meanwhile, there have been moves to retire analogue voice services and there is plan to switch off the EE 3G network by 2023.

“Our operational performance remained strong and our EBITDA grew during the first three months of the year, reflecting improved trading across most of our business and the positive benefits of our plans to modernise BT,” declared Philip Jansen, BT CEO.

“We’re powering ahead with our network build programmes … We’ve also reached a partnership agreement with our largest trade union, the CWU, allowing us to keep our modernisation plans on track.

“With trading conditions expected to see some improvement through the year, we have confirmed our outlook and remain confident that BT is on a path to growth.”

Microsoft deal

BT’s enterprise fortunes have been impacted by the Coronavirus pandemic, as well as long-term declines in legacy products and a decline in MVNO income. Meanwhile, its Global Division has had its own challenges.

In addition to its restructure programme and network modernisation projects, BT also hopes to take advantage of a wider convergence between the tech and telecoms worlds to open new revenue streams such as voice, cyber security, and cloud services.

To this end BT has expanded its partnership with Microsoft to deliver key business applications such as Office 365 with secure and reliable connectivity. BT will be able to offer its own branded global managed voice services though Microsoft Teams, the use of which has almost doubled in the past 12 months, offer superior customer service and security. The two firms will also work together on digital skills.

“BT and Microsoft are at the forefront of innovation in global digital platforms and connectivity that will take technology and communication beyond limits,” said Bas Burger, CEO of Global at BT. “This partnership will ensure all of Microsoft’s solutions work ‘Best on BT’ and support both companies’ commitments to improving digital skills in the community.”

“BT can use Microsoft’s cutting-edge tools to develop new communications services that meet the needs and demands of today’s customers,” added Omar Abbosh, head of industry solutions at Microsoft. “By aligning our visions for communication, connectivity, security and digital technology, Microsoft and BT will support real growth for businesses across the world.”

Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.