BT blames new 3Rs for its revenues slump to £4.5bn
Friday 02 November 2012
BT chief executive Ian Livingston blamed his own version of the three Rs – recession, regulation and rain – yesterday for a sharp fall in revenue at the telecoms giant.
Revenues slumped 9 per cent to £4.47bn in the three months to September against a 6 per cent drop in the period to June.
The BT chief said the worst rain in 100 years in Britain had led to a big increase in engineering call-outs and repairs, which meant BT was less able to cater for new customers.
"The water table was incredibly high," Mr Livingston said. "If you fill something with electricals with rain, it's not good for it."
Asked why other telecoms firms did not appear to be blaming the rain, Mr Livingston said: "I'm assuming we're not disagreeing about the fact there has been a lot of rain."
He insisted he was only referring to the three Rs "partly because the alliteration is good" and that the rain had been far less important than the impact of recession and regulation, which continues to put pressure on prices. The troubled global services division, which parted ways with its boss, Jeff Kelly, in September, was the worst performer as corporate clients in sectors such as banking cut spending because of the global economic downturn.
Revenues plunged 13 per cent and earnings before exceptionals were off 18 per cent in global services, although Mr Livingston maintained the order book was "encouraging".
He said it remained on track to meet its profit targets for the full year to March 2013 and revenues should show "an improved trend for the second half".
That was a change from two years ago, when Mr Livingston told the City to "expect improving underlying revenue trends from 2010/11 to 2012/13, with growth in 2012/13".
Pre-tax profit in the quarter was up 9 per cent at £602m.
Will Draper, a telecoms analyst at Espirito Santo, said there was "relief it's not worse".
BT faces a steep rise in costs from launching its own pay-TV sport channel next summer.
Mr Livingston said "we've done the vast majority of spend" on sports rights, after splashing out £738m on Premier League football.
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