British Telecom fails to excite

British Telecom announced their latest quarterly numbers and failed to excite anyone. Their revenues were up an anaemic 3%. And their net profits were flat and down a chunk after one off items.

Revenues from their traditional fixed line business continued to erode and were down 3%. The only bright spot was so-called “new wave” revenues: broadband, networked IT services and mobile, which rose 42% to £1.6bn and now represent a third of BT’s business.

So BT is finally behaving like the utility that conservative investors wanted them to. I bet they don't feel so good about that now. Particularly when they have had to sit on the sidelines and watch BT's old mobile business, MMO2, perform superbly over the last few years and get sold for an absolute fortune this year to Telefonica. BT should never have let go of O2.

And things will get tougher for BT in the medium term as the UK fixed line telco market gets further deregulated with local loop unbundling. BT has to be a case in point of the dangers of cutting businesses back too far and listening too much to investors.

You just have to look at Verizon, AT&T, Telefonica, France Telecom etc to see what might have been. The future for encumbant telecoms operators is to be leaders in IPTV, wireless and business services with an eye to international expansion. BT lacks the full mix. Shame.