Network a key enabler as profits at BT Ireland jump 11pc

13 May 2011

BT Ireland reported an 11pc increase in profits and said it is pushing a head with a 26pc increase in capital spend on network and IT infrastructure. Revenues decreased slightly by 3pc to stg£749.8m.

“BT has had a strong year in the Irish market – improving profitability and cash flow, while managing the pressure on our revenues,” Graham Sutherland, chief executive officer, BT in Ireland.

“We continue to transform our cost base, a process we began over four years ago, which is freeing up investment for us to inject into our Irish operations and the services we provide here.”

“We have diversified in the services and products we sell, focused our strategy on the business, government and wholesale sectors, and continuously invested in new areas of growth.  The network is becoming a key enabler for transforming how economies and organisations operate – by building a national fibre backbone for Ireland, BT is well placed to be the networked IT services retailer and wholesaler of choice in this country.”

Revenue decreased by 3pc in the year to stg£749.8 million,excluding the impact of foreign exchangeand transit revenue reductions, as a result of the challenging economic climate.

Profits (EBITDA) increased by 11pc year-on-year as a result of cost transformation programmes and the successful delivery of large retail and wholesale contracts. 

Capital investment and cost reduction

Gross managed costs, excluding capital expenditure, reduced by 11pc reflecting improved supplier management, property rationalisation and labour efficiencies.

Capital expenditure in network and IT infrastructure increased by 26pc year-on-year, stimulating new growth opportunities for the company.

This includes Total Transmission, an advanced next-generation fibre network in the Republic of Ireland being rolled out to provide high-speed, low-cost access to meet the massive transmission bandwidth requirements of businesses, government organisations and communications providers.

This major investment will double the footprint of the company’s national Ethernet and IP platform in urban and provincial areas, delivering up to 100 Gbps capability across its network and an expected future capability of 1 Terabit as this technology matures.

BT also continues to invest in local loop unbundling (LLU), providing it with another platform to offer broadband services direct to business and government organisations and, via its wholesale arm, to other communications companies.

With 50 exchanges now unbundled, the company has the capability to deliver high-speed broadband to more than 700,000 phone lines in the country.  Strategic investments were also made in data centre expansion, managed services capabilities, network health and IT platforms. 

BT and the cloud business

BT made very good progress in the business and government sectors, competing in the converged markets of computing, IT, and communications, and benefiting from customers’ gradual adoption of Cloud-based services.

It recorded double-digit percentage revenue growth in networked IT services for the second year running, and has become a leading reselling partner for top industry brands including Avaya, Cisco, HP and Microsoft.

Key retail contracts signed in the year included: data centre hosting services for Ryanair and Web Reservations International; voice and network services for Kingspan Group; network services for Primark; network and telecommunications services for Genworth Financial; networking services for Irish Life & Permanent; and video conferencing services for Element Six.

BT also successfully implemented a world-class Emergency Call Answering Service (999/112) for Ireland, and hasinvested stg£10 million in this platform to date.

BT’s advanced domestic and international networks, combined with a proven track record in managed services, helped BT to significantly grow its share of the wholesale market in Ireland.

The company now provides access to its network and services to the majority of communications providers in the market, adding new contracts over the course of the year with Telefónica Ireland, UPC, e|net, Global Crossing, AirSpeed Telecom, Complete Telecom and Tesco Mobile.  Most recently, Three Ireland awarded BT a stg£34 million contract for a Total Transmission solution to support its bandwidth requirements.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years