Is BT the key to broadband Britain?

Inside the Enterprise: BT's revenues might be down but its hold on the broadband market is stronger than ever.

Broadband speed

The latest financial results from BT make for interesting reading, not just for its shareholders, but for anyone with a stake in the progress of "broadband" Britain.

BT's overall revenues for the for the year to March 31 fell four per cent (although underlying revenues, which excludes the money BT makes from carrying traffic for other phone operators, did a little better). But the company's pre-tax profits grew by 16 per cent.

Three areas of BT's business seem to have done well: its global services arm, which has a 2 billion strong order book; the broadband business; and, surprisingly, landline telephones.

According to BT, the number of landlines run by the company has increased for six quarters in a row, suggesting that mobiles and VoIP services have not killed off fixed line yet.

IT professionals will be most interested in the company's broadband results. BT added 1,085,000 new homes and businesses to its wholesale (BT Openreach) network. But BT Retail, which sells broadband to end users under the BT brand, captured 54 per cent of that business, or close to 600,000 customers.

BT also revealed that its "superfast" or fibre broadband service now reaches 10 million homes and businesses in the UK, with a target of reaching two-thirds of homes and properties by 2014.

As BT stated, a 90 per cent fibre footprint would make the UK one of the best-connected European countries, but this will need a much more aggressive rollout of fast services outside of metropolitan areas.

BT is competing with other broadband providers for Broadband Delivery UK (BDUK) funds. But it will take more than Government subsidies to drive the rollout of high-speed fibre, especially to smaller towns and suburban areas that might not qualify for rural subsidies.

Analysts claim the rollout of fast internet outside of cities will be the most critical.

"The fibre schedule is good, but how much is only FTTC (fibre to the cabinet), and what about rural broadband, which is the higher hanging fruit?" asked Rob Bamforth, principal analyst at Quocirca.

He suggested that much of the growth in broadband is being driven by competition from BT's smaller rivals, such as Virgin Media. But Virgin is especially concentrated in urban and suburban areas, because of its origins as a cable TV service.

Not all IT departments like dealing with BT, but they may well have to. Ultimately, only a handful of providers have the size and scale to provide national, fast broadband services of the type businesses need to compete.

BT needs enough competition to keep it honest but a large enough potential market to keep it investing in fibre.

Stephen Pritchard is a contributing editor at IT Pro

Featured Resources

B2B under quarantine

Key B2C e-commerce features B2B need to adopt to survive

Download now

The top three IT pains of the new reality and how to solve them

Driving more resiliency with unified operations and service management

Download now

The five essentials from your endpoint security partner

Empower your MSP business to operate efficiently

Download now

How fashion retailers are redesigning their digital future

Fashion retail guide

Download now

Recommended

Department of Health and Human Services must improve cyber security info sharing
Security

Department of Health and Human Services must improve cyber security info sharing

30 Jun 2021
JEDI contract's future becomes murky after AWS court win
Policy & legislation

JEDI contract's future becomes murky after AWS court win

11 May 2021
Trump's election defeat isn't going to get Huawei back in the UK
Security

Trump's election defeat isn't going to get Huawei back in the UK

17 Nov 2020
BT Mini Whole Home Wi-Fi review: Value-conscious range extension
wifi & hotspots

BT Mini Whole Home Wi-Fi review: Value-conscious range extension

15 Oct 2020

Most Popular

The benefits of workload optimisation
Sponsored

The benefits of workload optimisation

16 Jul 2021
Samsung Galaxy S21 5G review: A rose-tinted experience
Mobile Phones

Samsung Galaxy S21 5G review: A rose-tinted experience

14 Jul 2021
RMIT to be first Australian university to implement AWS supercomputing facility
high-performance computing (HPC)

RMIT to be first Australian university to implement AWS supercomputing facility

28 Jul 2021