BT has announced plans to cut around 13,000 jobs over three years at a cost of GBP 800 million, mainly back office and middle management roles. The cuts are part of a new strategy to deliver sustainable growth by transforming its operating model, improving the customer experience, and delivering new converged connectivity services. The announcement came as BT released its Q4 results, with reported revenue down 1 percent for the year and 3 percent for the quarter.
The new strategy aims to deliver GBP 1.5 billion cost savings over three years. The new operating model will see BT focus on around 30 strategic sites and leave its headquarters in Central London. It plans to increase investment in FTTP and mobile network infrastructure within an annual capital expenditure of around GBP 3.7 billion. It will also hire around 6,000 new employees to support network deployment and customer service. In addition, BT will accelerate the restructuring of its Global Services division by launching new digital products with a greater focus on its top global customers, reduce capital intensity and significantly lower costs.
Reported group revenue was GBP 5.96 billion for the fourth quarter to 31 March and GBP 23.72 billion for the year, down 3 percent and 1 percent respectively. Reported profit before tax was up 98 percent for the quarter to GBP 872 million and up 11 percent for the year to GBP 2.62 billion. Adjusted EBITDA was up 1 percent to GBP 2.08 billion for Q4 and down 2 percent to GBP 7.50 billion for the year, with adjusted profit before tax up 1 percent in the quarter to GBP 1.04 billion and down 2 percent for the year to GBP 3.44 billion.
For the year to March 2019, BT is forecasting underlying revenue down around 2 percent, adjusted EBITDA of GBP 7.3-7.4 billion, and normalised free cash flow of GBP 2.3-2.5 billion.
BT reported G.fast premises of one million and FTTP premises of 560,000 passed in Q4, with over 1.5 million premises able to connect to 'ultrafast' broadband service. Openreach fibre connections reached 555,000 in Q4, with superfast fibre broadband passing almost 27.6 million UK premises. BT Consumer revenue generating units (RGUs) increased 3 percent to 2.03 per customer, helping ARPU grow 5 percent to GBP 41.70.
On a 12-month rolling basis, order intake was up 1 percent to GBP 3.39 billion for Business and Public Sector; down 28 percent to GBP 1.42 billion for Wholesale and Ventures; and down 17 percent to GBP 3.84 billion for Global Services.
BT and EE ended Q4 with a total of 29.6 million mobile customers, of which 19.6 million on 4G. Post-paid mobile additions reached 95,000 in Q4, taking the post-paid mobile customer base to 17.6 million. The number of pre-paid customers fell by 433,000 in Q1 to reach 5.5 million. Monthly mobile post-paid ARPU was down 1 percent to GBP 26, with churn at 1.2 percent. 4G coverage reached 90 percent of the UK landmass.
The UK broadband market increased by 100,000 in Q4, of which BT said its retail share was 2 percent. BT's retail fibre broadband customers increased by 202,000 in Q4, taking the base to 5.7 million, with 61 percent of BT's retail broadband customers now on fibre. The TV customer base stood at 1.74 million at end-March, down from 1.75 million a year earlier. The company said BT Sport delivered strong viewing figures across all platforms in Q4, up 19 percent year-on-year. All BT Sport customers are now on a paid tariff.
