Broadband services

Eurobites: BT Shrugs Off Troubles in Q1

Also in today's EMEA regional roundup: Telefónica has flat second quarter; SFR to shed jobs, say unions; Sky full-year profits up 12%.

  • BT Group plc (NYSE: BT; London: BTA) has enjoyed a productive fiscal first quarter, with revenues up 32% year-on-year to £5.77 billion (US$7.59 billion) and operating profits up 14% to £930 million ($1.22 billion) thanks to the addition of mobile operator EE to the company. Openreach , BT's network access division that has been at the heart of recent criticism from MPs and commercial rivals, saw revenues remain flat at £1.25 billion ($1.64 billion) and EBITDA fall by 1% to £632 million ($831 million). In the earnings statement, CEO Gavin Patterson claimed the integration of EE into the BT fold was going well, pointing to the fact that EE postpaid customers can now watch BT Sport, the incumbent's TV sport service. Fiber-wise, Patterson says that FTTx services are now available to more than 25 million UK premises and that "take-up remains strong." (See BT Reports Fiscal Q1 and BT Clings On to Openreach – Just.)

  • Underlying second-quarter revenues at Telefónica remained flat year-on-year at €12.72 billion ($14.09 billion), while operating income actually fell 1.5% to €1.56 billion ($1.72 billion). The operator raised its investment levels during the quarter, up 2.9% in organic terms to €3.65 billion ($4.04 billion) as it sought to accelerate the rollout of high-speed broadband. After the collapse of the proposed merger between Telefónica UK Ltd. (O2) and Three UK , the UK subsidiary is now back on the balance sheet. (See Eurobites: EU vetoes O2/3 combo.)

  • SFR , the French mobile operator owned by acquisition-hungry billionaire Patrick Drahi, plans to shed around a third of its workforce, according to a Reuters report. Two union representatives told Reuters that 5,000 staff could be let go between 2017 and 2019. Altice bought SFR from Vivendi in 2014. (See Eurobites: Numericable Wins SFR M&A Tussle and What's It All About, Altice?)

  • Sky , the UK-based pay-TV behemoth, continues to look strong, reporting full-year revenues up 7% to £11.96 billion ($15.73 billion) and operating profit up 12% to £1.55 billion ($2.04 billion). One of the few dark clouds, however, was an increase in the rate of customer "churn," up to 11.2% from 9.8% in 2015 in the UK and Ireland, as Business Insider reports.

  • Dutch incumbent KPN Telecom NV (NYSE: KPN) managed a 1.3% year-on-year rise in net profit in the second quarter to €205 million ($227 million), despite revenues being down by 4.3% to €1.67 billion ($1.85 billion). The operator is having some success in the take-up of fixed-mobile bundles -- 38% of its postpaid base and 33% of its broadband base have now opted to go down the bundle route.

  • Swisscom AG (NYSE: SCM) has introduced voice-recognition software on its customer hotline for added security. Voiceprint measures different voice characteristics such as frequency, speed, pronunciation and accent.

    — Paul Rainford, Assistant Editor, Europe, Light Reading

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