Profits at BT's Irish unit up, revenues drop

PROFIT AT BT’s Irish unit rose by 14 per cent in the first six months of its financial year, despite a drop in revenue.

The company said “challenging market conditions” were to blame for a 4 per cent decline in underlying revenue, to £373.6 million for the six months to September 30th. However, a reduction in gross managed costs of 14 per cent helped push the division to profit.

BT Ireland chief executive Graham Sutherland said the company had been “aggressively managing costs” for the last four years and this was paying off.

He said that while revenues were under pressure in both sides of BT’s business – its traditional telecoms business and the provision of IT services – there were signs of a pick-up. Revenues were down 5 per cent in the first quarter but this improved in the second quarter when sales were down 3 per cent year-on-year.

“We are starting to see business pick up and that’s reflected in the contracts we are signing,” he said.

The company secured a number of contracts it described as significant, with companies such as eBay, VHI Healthcare, Danske Bank and Glanbia. It was also involved in the implementation of the State’s emergency call answering service.

The wholesale division also performed strongly. BT Ireland delivers services for a number of communications companies in the Irish market including 3 Ireland, Telefónica O2 Ireland, UPC and Vodafone Ireland.

BT Ireland has invested in its network infrastructure throughout the State, including extending its 24Mb broadband to more than 500,000 lines and building 150 ethernet nodes to bring speeds of up to 10Gbps to customers.

Mr Sutherland said there was “a lot of rhetoric at present in Ireland around next generation networks” but what was needed was a competitive market that would incentivise the private sector to invest.

“There is always room for government support in rural areas where it’s not economical, but fundamentally the private sector will provide most of it,” he added.