BTwatch Report #355 - June 2024

Executive Brief:

GROUP: BT Group Chief Executive AllisonKirkby sought to refine and refocus the Group’s strategic roadmap as part of the FY23−24 earnings call, redrawing BT’s B2B boundaries and putting the UK at the heart of plans. Indeed, Global has been put on the chopping block, with attention and resources instead set to be channelled to assert dominance domestically. Financial performance was broadly as expected, with familiar claims that Business is on the mend and plaudits for Openreach’s fibre build pace. Rhetoric has now shifted from network deployment to monetisation, however, as capex passes its peak and customer adoption becomes the priority. [pp.6 –18.]

Meanwhile, Policy & Public Affairs Director Helen Burrows issued a stark review of current digital TV and broadcasting regulation, and called for government and regulator Ofcom to rework policy to enable what is widely seen as an inevitable IPTV migration. Ofcom has proposed three potential approaches for the future of digital terrestrial TV, all of which will require close consideration of the impact on vulnerable customers. [pp.19 –21.]

Senior swaps include a new Data & AI leader after Zoë Webster exits the Group, leaving a legacy of AI adoption and foundations for scaling. BT Business changes include senior shuffles for Central Government accounts, while Openreach opted to leave Corporate Affairs & Brand unfilled after Catherine Colloms departs. [pp.23 –25.]

TECHNOLOGY: BT’s Managing Director for Research & Networks Strategy Gabriela Styf Sjöman has called on policymakers to take a holistic approach to innovation strategy, in a bid to enable UK telcos to meet the demand for digital connectivity. She urged the government and regulators to develop “coherent” strategies to enable a “healthy ecosystem”. [pp.28 –30.]

CONSUMER: At Consumer, progress has been made to establish ‘new EE’ but the ‘old BT’ will remain for the foreseeable, with a place for Plusnet in the broadband market, too. Plusnet’s time in mobile is over, however, as the budget brand’s ARPU was found to be not worth ‘playing with’, while BT Mobile will also be deprioritised. BT is in the early stages of leveraging the EE brand, Kirkby said, and is beginning to take advantage of the EE ID‑led platform model established under Marc Allera’s leadership. [pp.33 –37.]

BT has delayed its all‑IP migration programme again, claiming a “refined” timeline by ostensibly redefining the plans after years of challenge. 2.5 million BT Consumer customers have switched to a digital landline, but around four million Consumer and one million Business customers are yet to make the move. [pp.38 –40.]

BUSINESS: BT intends to withdraw from its ‘global’ footprint and instead invest more singularly in the UK’s enterprise market. BT Business performance remains gloomy and, despite more optimism about the division’s prospects among management, there is little data to back up claims that a turnaround is on the horizon. Kirkby hopes that continuing the international retreat and further leveraging network‑as‑a‑service platform Global Fabric will supposedly support that return to growth. [pp.44 –49.]

OPENREACH: Openreach has earned “preferred bidder status” and will pursue rural Project Gigabit infill contracts to reach rural areas “faster”, Kirkby has said. Smaller contracts failed to attract Openreach interest but, with larger areas soon up for grabs, Openreach and peers are looking to swoop. Kirkby said it will look to pick up contracts where smaller challenger altnets have failed to deliver, too, to further add to Openreach’s rural fibre build plans. [pp.52 –56.]