Saturday, December 2, 2006

BT Sharply Reduces Reliance on Voice Revenue

BT has done a far better job of diversifying its revenue streams, by some measures, such as the percentage of total revenue coming from voice. BT gets less than 20 percent of its total revenue from voice. Most other tier one providers still generate 60 percent of more of total revenues from voice. In at least some cases, voice represents 80 percent of total revenue. In this regard, BT arguably outperforms all other tier one service providers.

This might explain BT's bullishness about its new all-fiber, all-IP network. It already can see its own future as one in which voice is not the dominant revenue driver. Nor is BT suffering from the scale of its capital investment. BT's profit in its second quarter rose 28 percent to £475 million, or $905 million, on sales of broadband Internet access and corporate computer-network contracts. BT's revenue rose 3.7 percent to £4.94 billion in the three months ended Sept. 30. We still will argue about the wisdom of 21CN and the pace of building all-fiber, all-IP networks. But BT seems to be getting the job done.

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