BT relaunches turnaround
• UK telecoms group plans consumer-friendly strategy that blend mobile and fixed broadband
Britain’s biggest telecoms company, BT, aimed to reinvigorate its unloved brand by combining the strengths of its fixed-line and mobile networks, it said on Wednesday, to relaunch a stalled turnaround under its embattled CEO.
Britain’s biggest telecoms company, BT, aims to reinvigorate its unloved brand by combining the strengths of its fixed-line and mobile networks, it said on Wednesday.
This is an attempt to relaunch a stalled turnaround under embattled CEO Gavin Patterson, whose efforts to transform BT into a modern communications provider have been undermined by regulatory issues, pensions and accounting fraud, which have led to investor disquiet as its share price tumbled to fiveyear lows.
On Wednesday, it set out a strategy from consumer boss Marc Allera to offer seamless services such as supercharged broadband to provide customers with faster speeds and a hub offering the best TV content to counter BT’s image of a former telecoms monopoly dogged by bad customer service.
“The way our customers feel about BT needs to evolve, needs to change,” he told reporters.
BT, which runs the country’s biggest broadband network, bought market-leading mobile operator EE in 2015 as part of its drive to modernise the group, acquiring a brand synonymous with superfast connectivity and popular with young Britons.
While it has already stripped out costs by integrating backoffice functions, BT will now provide customers with a more joined-up offering, backed by a marketing campaign and a move to improve its customer service reputation by bringing its call centres back to Britain and Ireland by 2020. The first example of its converged offering would be hybrid broadband technology, which combined 4G mobile and fixed-line broadband to boost Wi-Fi signals in customers’ homes and maintain connections if the fixed-line failed, Allera said.
To boost its TV offering, BT would make Amazon Prime content available on its platform, in addition to Netflix, and from 2019 Sky’s content on Now TV, providing a wide range of programming in one place.
“Convergence isn’t just about bundling products,” Allera said.
“We are going to create a new, smart, converged network for our customers. We are going to be the only place to get all of this content on one box with an integrated search experience.”
The consumer relaunch designed by Allera has become all the more important since the group announced plans to cut 13,000 staff and close its London headquarters, highlighting the pressures faced by the company and Patterson.
EE was the one strong performer in 2017 and the new strategy is designed to maintain that lead over rivals in a retail broadband market in which it competes with Sky, TalkTalk and Virgin Media.
BT Consumer, which includes BT, EE and value brand Plusnet, accounts for about 40% of group revenue.
Analyst Paolo Pescatore of CCS Insight said that the update provided a much-needed boost to BT, given the widespread negative publicity it had endured in recent months.
“More importantly, the new structure and strategy provides better clarity on the future direction of the consumer segment, which has been in limbo for some time.”
The Amazon partnership, he said, could turn around BT’s fortunes, given that BT TV had recorded losses for the past two quarters and subscriber growth had been lacklustre in recent years.