BT Group accelerated plans to wipe £2 billion from its annual costs [1] as part of continuing efforts to streamline the business, as it revealed a drop in earnings from its Enterprise and Global divisions dragged on fiscal H1 revenue.
In its results statement for the six months to end-September, BT CEO Philip Jansen (pictured) praised the progress of a drive to refocus the company and brought forward a goal of cutting £2 billion from annual costs by a year.
Its latest savings target was originally slated to be achieved in its FY25 (year to end-March 2025) with this now set to be completed in FY24.
The news comes days after the operator disclosed it had already reached an earlier target of removing £1 billion from annual costs by March 2023, following media leaks on the issue [2] linking the acceleration of savings to a speculated takeover attempt [3] by shareholder Altice UK.
Jansen said the forthcoming cuts were “all part of creating a leaner BT with simplified processes and improved customer experiences”.
On originally announcing the modernisation programme, the operator noted a need to simplify its product portfolio, automate customer service, upgrade IT systems and migrate users from legacy technologies to fibre and 5G.
Earnings
By the end of H1, the company’s 5G network covered 40 per cent of the UK population with 6 million premises connected to full fixed fibre. It intends to increase fibre coverage to 25 million buildings by 2026.
Jansen noted the progress of its fibre buildout would lead to a reduction in capex as it passes the peak years of construction.
BT booked a 3 per cent year-on-year drop in revenue in H1 to £10.3 billion, a reduction attributed to its Global and Enterprise units. Its Consumer business, which includes fixed operations and mobile operator EE, had broadly flat revenue.
Net profit fell 50 per cent year-on-year to £431 million on a number of one-off items and tax charges.
[1] https://www.mobileworldlive.com/featured-content/home-banner/bt-to-wield-axe-on-legacy-services-costs
[2] https://www.mobileworldlive.com/featured-content/home-banner/bt-hits-1b-cost-cut-target-early
[3] https://www.mobileworldlive.com/featured-content/home-banner/bt-rumoured-to-be-bracing-for-potential-altice-move
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