BT Global Services to double US revenues and cut costs

Friday, September 15, 2006

BT Global Services this week laid out its vision for the next three years: its revenues to double in the USA, Japan, India and China, and £400m of annual savings, achieved through offshoring and slashing its procurement costs. £200m of this will come from a reduction in what it spends on technology from vendors on large systems integration projects.

CEO Andy Green admitted that BT had been slower than rivals such as IBM and Accenture to ramp up its offshore headcount. But he claimed that BT Global Services is thriving as the fastest-growing division within BT. He said that the division was outperforming its closest rivals, T-Systems, Orange Enterprise and AT&T Enterprise, which had all posted revenue declines for the most recent quarter. He said BT was fast becoming a familiar brand to businessmen in New York, Tokyo, Mumbai and Shanghai.

He disclosed a few revenue figures not revealed before. For the financial year ending March 2006, UK revenues rose just 2% to £5.5bn, while overseas revenues shot up 48% to £3.3bn. And of the £8.8bn total revenue, £1.6bn was captive work for its parent, while of the remaining £7.2bn, 18% came from the UK government sector and 17% from financial services. BT said it still harbours ambitions to conquer America, despite the failure of the ‘Concert‘ partnership with V in the 1990s.

In a separate story, BT announced it has chosen Chinese vendor ZTE to develop a dual-mode handset — 3G and DAB-IP — for launch by its BT Movio subsidiary next year. DAB-IP (in other words, IP over the DAB digital radio network) will enable BT Movio to broadcast four TV channels at acceptable quality to the handset. 3G will enable video-on-demand, so that the users can specify what video clips or programmes they wish to watch. UK legislation specifies that no more than 30% of the DAB spectrum can be used for non-radio purposes, so BT is lobbying for more DAB spectrum to be released, to enable higher quality video and/or more TV channels.