BT Ireland reports 5% growth in first-half revenues

Revenues at BT Ireland grew 5.4 per cent to £392.4 million (€468.6 million) for the six months to the end of September, the company said today.

Its parent BT Group also announced a plan to cut its global workforce by 10,000 jobs by the end of March next year.

BT Ireland employs 1,000 people in the Republic and 2,000 in Northern Ireland, and chief executive Chris Clark said while the composition of the Irish workforce was changing there was no plan to reduce overall numbers.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) for its Irish operations grew by 13.5 per cent year on year, although the company did not provide a figure.

The BT group announced EBITDA before specific items for the six months to September 30th of £2.8 billion down 2 per cent, beating analysts forecasts. Group revenues for the period were £10.5 billion up 3 per cent.

Mr Clark said one reason BT Ireland had outperformed was its success in implementing group strategy. "We are moving away from being a traditional telecoms company into what we call a network IT services company."

This focus was reflected in the securing of a number of significant contracts over the period, including Bristol Myers Squibb, EMC, Hays Recruitment, Kilsaran Concrete, Prometric, and Thomas Crosbie Holdings. These contracts were being secured from other telecoms providers, Mr Clark said.

The rate of broadband subscriptions slowed over the last six months with a "definite slowdown" now evident in some business areas, although other areas continued to grow.

"There is no doubt the broadband market is slowing down. There are two reasons: It is getting towards a natural saturation point and, let's face it, any individual consumers and small businesses that have put off taking broadband for the last few years, why would the dig into their pockets now?"

BT Ireland's DSL broadband connections in the Republic grew 10 per cent to 81,500 by the end of September. One consequence of the housing slowdown was broadband "churn", a term for changing service provider, had slowed as the number of people moving house declined.

BT Ireland, which operates on both sides of the Border, reported a 14.7 per cent year-on-year increase in broadband subscribers in the North to 160,000.

Although he declined to make forward projections, Mr Clark expects market conditions to get worse in 2009. Over the coming year BT Ireland would concentrate on expanding its network IT services for businesses, public sector clients and wholesalers, Mr Clark said.

Analysts welcomed the BT Group results and their shares rose in London on the news.

BT has a global workforce of around 160,000 direct and indirect staff. The company said it was halfway through its job cutting process and had cut 4,000 jobs to date. It aims to achieve remaining cuts through natural turnover and said that the direct jobs were mostly coming from Britain.

Asked if BT could cut more than the 10,000 staff, BT Chief Executive Ian Livingston pointed out that the group had once employed around 250,000 and said he did not think this cut was a one-off.