Having cut itself free from the investment drag of mobile phone unit Cellnet, now spun-off and rebranded mmO2 [WAMN: 04-Sep-01], British Telecom is to go for growth via its grossly under-exploited broadband internet service – considered by many to be the key to the full commercial development of the web.
Reporting better than anticipated Q3 results, new chief executive Ben Verwaayen, revealed that the telecoms giant is poised to launch a major broadband marketing drive with an accompanying reduction in its price structure – much criticised as a brake on consumer uptake of the technology.
Verwaayen, however, was coy about broadband strategy detail, saying only that he regarded it as “the future for BT”. He intends to reposition the group as a consumer-oriented organization with a makeover of its image as a torpid ex-monopoly.
“There has been too much of an emphasis on financial engineering,” he said of the massive but vital debt-reduction programme that racked the group during the last twelve months. “Now it's time to look at fundamentals, at business.”
Many observers hope that Verwaayen will attach equal emphasis to extending the broadband network which still remains unavailable across much of the UK – despite the relative maturity of the technology and the readiness of many would-be broadband customer to sign up for the service, even at BT’s currently inflated prices.
On the Q4 fiscal front, BT reported a pre-tax profit of £381 million ($538.8m / E618.6m), down 21% from £483 million year-on-year, but bettering analysts’ expectations of around £325 million.
The telecoms titan also cut its debt by £2.9bn during the quarter, reducing the total to £13.6bn. In Thursday trading on the London Stock Exchange, BT shares rose by 5.1% (12p) to £2.39.
Data sourced from: Wall Street Journal; additional content by WARC staff