BT profits up as firm emerges as key 'quad play' provider
08 May 2015
Mark Skilton, Professor of Practice in the Information Systems & Management Group, believes the latest figures from the BT Group show the firm is well on the way to becoming successful ‘quad play’ service provider.
The British telecom giant has announced a 14 per cent rise in pre-tax profit to £2.645 billion for the year up until the end of March.
Despite a drop in revenue by two per cent to £17.85 billion however, the firm announced it had connected a record 455,000 new fibre broadband customers and 121,000 retail broadband customers in the same period.
Professor Skilton believes these figures are a sign of success for BT in what is a highly competitive market.
Professor Skilton said: “"BT’s 14 per cent rise in pre-tax profits against a two per cent drop in revenue is indicative of the highly competitive pricing in the service bundle market.
"The reported record 455,000 new broadband customers are an example of how focus on profitable product lines – where tariffs management of different offers to customers – is critical to profit, even if the sales volume falls due to cut-throat competition.
"BT’s £12.5 billion purchase of EE shows the firm is well on the way to moving in the direction to be what observers call a ‘quad play’ service provider of mobiles, telephony, broadband and Pay TV.”
Professor Skilton believes the purchase of mobile giant EE is crucial to BT’s push to become the top ‘quad play’ provider, and a sign of the importance of mobile data usage in an era of on the go technology providing people with access to content away from the realms of their sofas and desks.
“The split between telecoms infrastructure players, such as the BT Group, and the mobile players in the market are reducing as they both seek to build their traffic management and service offering,” added Professor Skilton. “After all, the internet growth is in full swing towards video on-demand, social media video advertising and the plethora of internet of things about to hit the market.”
"This is the reality today of digital media services working across mobile, broadband, Wi-Fi, and the plethora of apps and content services and websites.”
Professor Skilton suggests just owning across the overall infrastructure is no longer the way for firms like BT to leverage the massive traffic opportunities driving subscription charging models.
“The BT Group’s purchase of mobile giant EE can be seen as realisation of the fact the 'Era of Mobile' is now in fact, the 'new PC' where the xyz generations are now using mobile devices for everything from work and entertainment to everyday activities.
“This is the new reality of the consumer markets that are highly segmented and tribal in the hyper connected social network world.
“This means opportunities to build bundles of services that can have attractive pricing options for mobile, content and broadband, as well as Pay TV and services that can drive better profit margins.
“The reality is that competition has moved to the ecosystem of services where higher quality program content and choice for customer consumption in the new competitive market battleground.”
Professor Skilton teaches the Information Systems Consultancy module on the MSc Information Systems Management & Innovation as well as the Introduction to Consulting on the MSc Business courses listed on the Postgraduate courses page.