BT Group, one of the leading telecommunications companies in the UK, announced a significant increase in revenue for the three-month period from April to June 2023. The company reported a 4 percent rise in revenue, reaching an impressive £5.2 billion.
The revenue surge was primarily attributed to a combination of factors. BT experienced a surge in sales of its fiber-enabled products, benefiting from the growing demand for high-speed internet connections. Additionally, price increases in Openreach, their infrastructure subsidiary, contributed to the revenue growth.
In the Consumer division, BT achieved £2,423 million in revenue, marking a 3 percent increase from the same period last year. This improvement was largely driven by higher service revenue, with customers embracing fiber-to-the-premises (FTTP) services, as well as experiencing higher roaming usage.
The Business division also saw a positive upswing, with revenue reaching £2,027 million, up by 3 percent. This growth was supported by improved equipment trading, catering to the demands of businesses for efficient telecommunications services.
Openreach, the infrastructure arm of BT, reported remarkable growth with revenue totaling £1,526 million, representing an impressive 8 percent increase. Openreach’s performance was fueled by a strong demand for FTTP connections, with the company expanding its footprint to approximately 11 million premises.
Overall, BT’s earnings before interest, taxes, depreciation, and amortization (EBITDA) reached £2 billion, showing a 5 percent increase. Additionally, the company reported a profit before tax of £536 million, demonstrating a notable 11 percent growth compared to the same period last year.
BT’s FTTP expansion efforts have been successful, with the company achieving 44 percent completion of its target to cover 25 million premises. Approximately 6.2 million premises are currently undergoing initial build for FTTP services. In the last quarter, BT passed 718,000 premises, with an average build rate of 55,000 per week.
Customer demand for FTTP services in Openreach surged, with a remarkable 34 percent year-on-year increase in orders during Q1. The net addition of 383,000 connections brought the network’s take-up rate to an impressive 32 percent. As a result, the total number of FTTP connections grew to 3.5 million.
Despite the positive results, BT’s broadband base in Openreach declined by 126,000 during Q1. This decline was due to losses from competitors, a weak broadband market, and communications providers discontinuing copper lines. BT anticipates a further decline of around 400,000 broadband connections in FY24.
BT’s Consumer division witnessed growth in broadband and postpaid mobile average revenue per user (ARPU). Consumer broadband ARPU rose by 5 percent to £42, while Consumer postpaid mobile ARPU increased by 9 percent year-on-year to £19.7. These increases were primarily driven by CPI-linked pricing. The churn rate for both broadband and postpaid mobile remained stable at 1.1 percent and 1.0 percent, respectively.
The retail FTTP base saw a remarkable 50 percent growth, reaching 2.0 million connections, of which 1.9 million were in the Consumer segment and 0.1 million in the Business segment. BT’s 5G base also experienced significant growth, reaching 9.2 million connections, representing a 53 percent year-on-year increase.
BT acknowledged that while there was positive momentum in the Small and Medium Business (SMB) segment, declines were observed in the CPS (Consumer and Public Services), Global, and Wholesale segments. These declines were attributed to higher input costs and a decrease in high-margin managed contracts from previous periods.
With a continued focus on customer satisfaction, BT Group achieved a Net Promoter Score (NPS) of 23.7, indicating a 1.8-point increase compared to the previous year. The company emphasized its commitment to delivering excellent value for money and providing top-notch telecommunications services to its customers.
Overall, the latest financial report indicates BT Group’s continued efforts to meet the growing demand for fiber-enabled products and services, as well as its commitment to enhancing customer experience and driving innovation in the telecommunications sector.
