As BT Business grapples with falling revenues and the challenging landscape of telecommunications, the company has appointed Jon James as the new CEO, hoping to bolster its domestic market focus. James, who previously headed Danish operator Nuuday, will officially take over in March. His appointment allows the former CEO, Bas Burger, to shift his attention to selling BT’s international operations, encapsulating BT’s strategic pivot to prioritize the UK market. James expressed excitement for his new role, emphasizing the potential to solidify BT Business’s standing for both customers and shareholders.
Revenue Challenges and Opportunities
BT Business reported a 2% revenue drop to £1.98 billion for the quarter ending in December, along with a 5% decline over the first nine months of the financial year. These decreases have been primarily attributed to underperformance in its international operations. Despite these challenges, BT has indicated stability within its core UK channels. A recent £1.3 billion contract with the UK Home Office serves as a promising sign for BT’s domestic endeavors.
The realignment of responsibilities, with Bas Burger focusing on divesting international assets, underscores BT’s renewed commitment to its UK market, a strategy emphasized by Group CEO Allison Kirkby. Although Kirkby has generally overseen positive outcomes since assuming her role a year ago, the announcement of the latest quarterly earnings saw a lukewarm market response, resulting in a 4% drop in BT’s share price.
Group-Level Performance Insights
On a broader scale, BT’s revenue fell by 3% year-on-year, amounting to £5.2 billion. This decline was largely driven by poor performances from BT Business abroad and a drop in handset sales within the Consumer unit. Specifically, BT Consumer experienced a 2% revenue decrease, falling to £2.5 billion, while service revenue saw a slight uptick of 0.4% year-on-year. Positive developments include progress in fiber and 5G expansion, although the period also saw a reduction of 4,000 mobile postpaid customers and the loss of 40,000 broadband accounts.
Bright spots remain in BT’s portfolio. Openreach, BT’s network division, continues its extraordinary fiber rollout, surpassing one million premises for the fourth consecutive quarter and achieving a record by connecting nearly half a million new customers. Kirkby highlighted these milestones and pointed out ongoing efforts in cost transformation, which have alleviated the impact of lower revenue from international operations and weak handset sales.
Looking Forward
BT Business is navigating through a period of declining revenues and a tough telecommunications landscape, leading to the appointment of Jon James as the new CEO. James, who has a notable track record as the former head of Danish operator Nuuday, will officially step into his new role in March. This strategic leadership change allows the former CEO, Bas Burger, to concentrate on divesting BT’s international operations. This move is part of BT’s broader strategy to zero in on strengthening its position in the UK market. Jon James expressed his excitement about the new role, underlining the opportunity to enhance BT Business’s reputation and competitiveness for both customers and shareholders alike. He believes that his experience will be crucial in navigating the complexities of the telecommunications industry and steering BT Business towards a more prosperous future. The company is optimistic that these changes will lead to a revitalized focus on the domestic market, ultimately boosting customer satisfaction and shareholder value.
