BT transforms into global player

BT's overseas revenue is now 37 per cent of the total

While BT's market in the UK gracefully declines, the company is busy turning itself into a global IT and services player, especially in the rapidly developing areas of India and China. 

The telco said in a briefing to analysts yesterday that its overseas revenue is now 37 per cent of the total, and that it expects revenues from the US, Japan, India and China to more than double by 2008/9.

"BT's corporate business is an increasingly important part of the company's growth strategy," said Andy Green, chief executive of BT Global Services. "Our diversification into global networked IT services sets BT apart from other telcos."

A proportion of BT's overseas growth is down to its contract to provide managed services to Reuters, according to Green.

BT is increasingly able to sign up customers requiring their telco partner to have global reach because BT is already in the countries the prospective customer is interested in courtesy of Reuters. 

BT's revenues from the UK consumer market declined by seven per cent last year, a position which Green described as "a good performance" considering BT's own estimates that revenue from this segment are declining at 11 per cent per annum.

The telco is also to cut £400m from its annual expenditure within three years, £50m of which will come from about 500 job cuts and £100m from moving labour-intensive operations to cheaper markets like India.

Around £50m will come from "repeatability", according to Green, a sign that BT is at last tackling its reputation for building bespoke solutions for each large customer when it could reuse many components of its services.

The remaining £200m will come from "procurement savings", i.e. squeezing suppliers on price.