BT Group Plc [BTY] plans to cut costs by a further GBP1 billion pounds ($1.6 billion) over the next three years as increased efficiency is the only way to increase profits with revenue on the slide. For the second quarter to September 30, it posted net income up 18.6% at GBP382 million ($639.7 million) on revenue 2% lower at GBP4.6 billion.
While the UK it pointed to soaring sales of products such as broadband and mobility services, it has yet to compensate for the decline in its traditional fixed-line business.
BT blamed regulatory changes, which cut fixed-to-mobile termination rates, for the decline in its traditional revenue, but it denied that competitors are making inroads into its consumer market share, which it said fell only 0.2% to 72.4% over the quarter.
With debt now down to GBP8.8 billion ($14 billion), the company announced an unspecified share buy-back program to sweeten shareholders disenchanted with the past performance of the company.
Its retail revenue fell 7% in the quarter to GBP3.3 billion pounds ($5.6 billion) with a 7% decline in voice services. However, broadband revenue doubled to GBP68 million ($114.9 million). Revenue at its wholesale operations fell 7% to GBP2.7 billion ($4.6 billion).
Despite a fiercely competitive market, BT global services serving the corporate sector performed well with increased profitability and a 5% increase in revenue to GBP1.38 billion ($2.3 billion).
BT has had to abandon an ambitious target of 6% annual revenue growth. After spinning out its mobile arm, growth will be hard to come by.
This article was based on material originally published by ComputerWire.