Service Provider News

BT Revenue Declines as Profit Increases

BT Group reported quarterly revenue of �5,006 million, down 4%, and adjusted EBITDA of �1,399 million, up 6%, as total group operating costs, before specific items, decreased by 6% to �4,424m, primarily due to reductions in total labour costs and the delivery of other cost savings by all lines of business. Adjusted profit before tax was �446 million, up 17%.

�We have made an acceptable start to the year, delivering improved financial results while investing in the future of the business. In TV we are offering great value premium sports packages and can now compete on a more even playing field. We hit the first major milestone in our fibre roll out, passing over 1.5m premises, and we are now running at an average rate of around 100,000 premises passed every week. In BT Global Services we continue to win significant contracts due to our ability to deliver a world class service to our customers," stated Ian Livingston, Chief Executive.

For BT Retail, revenue decreased by 7%. This decline was largely due to the ongoing reduction in calls and lines revenue. Excluding the one-off revenue benefit last year, our Consumer revenues were down 6%. Business revenues were down 4%. Consumer ARPU increased to �314, up �5 over the previous quarter, principally due to increasing take up of broadband. Broadband net additions were 96,000 in the quarter and BT�s retail market share was 40%. Since the launch in January of BT's "Infinity" fibre based broadband service has seen order levels accelerate.

For BT Wholesale, revenue declined by 10%. Excluding the �44m reduction in low margin transit revenue, primarily due to mobile termination rate reductions, revenue declined by 2%. This decline reflected in part continued reductions in broadband and circuits revenue of �69m. Managed network services (MNS) revenue grew by 19% to �199m and now represents 24% of external revenue (Q1 2009/10: 19%). 42% of external revenue is now underpinned by long term contracts (Q1 2009/10: 34%).

For Openreach, revenue declined by 8%. Growth in Ethernet volumes stimulated by lower prices and other connection revenues offset the continued migration from WLR to lower priced MPF. Net operating costs reduced by 17% partly due to changes in the internal trading model offsetting the revenue decline and lower leaver costs. Capital expenditure increased by 16% due to the increased investment in the fibre roll.... > More

AT&T Selects Alcatel-Lucent, Cisco, and Juniper for IP/MPLS/Ethernet/EPC Domain

AT&T has selected Alcatel-Lucent, Cisco, and Juniper Networks as its Domain Suppliers for IP/MPLS/Ethernet/Evolved Packet Core equipment needed for its industry-leading IP-based network. Financial terms were not disclosed.

"After conducting an extensive review of multiple IP/MPLS/Ethernet/Evolved Packet Core equipment suppliers, we're pleased to extend long-standing relationships with Alcatel-Lucent, Cisco, and Juniper Networks," said Tim Harden, President of AT&T's Supply Chain and Fleet Operations organization. "AT&T's selection of these three industry-leading suppliers as Domain Suppliers showcases our ongoing commitment to meet the quality expectations of our customers today, while preparing for the demands of tomorrow."

AT&T said its Domain Supplier program, launched in September 2009, facilitates a more collaborative relationship with its equipment and software suppliers. The company noted that its network carries 18.7 petabytes of IP and data traffic on an average business day, the equivalent of transporting the entire digitized Library of Congress more than 250 times. This traffic volume has doubled over the last four years. The network includes more than 880,000 route miles of fiber-optic cable.

AT&T in January announced total 2010 capital expenditures are expected to be between $18 billion and $19 billion, a level framed by the expectation that regulatory and legislative decisions relating to the telecom sector will continue to be sensitive to investment.... > More

France Telecom Reaches 182 million Customers Accesses

The France Telecom Group reported consolidated revenues of 22.144 billion euros for the first half of 2010, down 2.2% on a comparable basis. EBITDA was 7.745 billion euros for a margin of 35.0%, with the erosion limited to 0.9 points on a comparable basis. The company confirmed its ambition for organic cash-flow generation for 2010 and 2011.

Capital expenditure was 2.114 billion euros in the first half, for a CAPEX rate of 9.5% of revenues organic cash flow of 3.989 billion euros in the first half of 2010.

Some highlights:

A total year-on-year increase in the customer base of 3.8%, with 182 million customers at 30 June 2010

There was a 6.6% growth in the mobile customer base to 123.1 million customers at 30 June 2010, driven by Africa and the Middle East with a combined total of 34.0 million customers at 30 June 2010, an increase of 18.4% year on year.

There was a 2.2% growth in ADSL broadband subscribers (13.2 million customers) and rapid growth of digital TV with 3.6 million subscribers at 30 June 2010, a year-on-year increase of 34%

In France, broadband ARPU grew by 4.6% to 36.6 euros per month. The company's Pay TV customer base reached 1,687,000 vs 1,619,000 at the end of March 2010. Orange Cinema Series + Orange Sport had about 752,000 subs.

The company experienced stable first half 2010 revenues compared with the first half of 2009 excluding the effects of regulation, an improvement after the 0.9% downturn recorded in the second half of 2009:

There was a very strong growth of 8.0% in Africa and the Middle East driven mainly by the 29% increase from new operations.

Growth of operations in France (+0.3%, including +4.0% growth in mobile services), Spain (+2.5%, including +3.7% growth in mobile services), Poland (an improvement of 1.8 points to -3.4%, following -5.2% in the second half of 2009) and the other European countries (+0.9%), led by Belgium.

France Telecom will propose a dividend of �1.40 per share for the fiscal years 2010, 2011 and 2012, subject to a vote in favour of these payments by shareholders at the relevant Annual General Meetings.

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Portugal Telecom Selects Alcatel-Lucent's HLN Strategy

Portugal Telecom has awarded a three-year agreement to Alcatel-Lucent to extend the capacity of its IP/MPLS network to support existing and new services to its growing customer base. PT will evolve its converged IP/MPLS network based on Alcatel-Lucent's High Leverage Network (HLN) architecture.

The architecture will leverage an all-IP network layered with embedded intelligence and application awareness that improves the end-users experience as well as PT's ability to bring new services to market more efficiently. The platform will also enable Portugal Telecom to implement 100 Gigabit Ethernet, L2/L3 mobile backhaul and IPv6 services.

Specifically, Alcatel-Lucent will enhance PT's use of the 7750 Service Router, managed by the 5620 Service Aware Manager, to become the converged service edge for consumer Internet, IPTV and VoIP services, Carrier Ethernet VPNs services for enterprises and mobile backhaul services. The new, distributed architecture locates the IP service edge functionality at the edge of networks, close to subscribers, providing a significant increase in bandwidth per subscriber.... > More

Telef�nica gains control of Brazil's Vivo

Telef�nicareached an agreement with Portugal Telecom to purchase 50% of Brasilcel held by the Portuguese operator.

The entity to result from the Telesp-Vivo business combination, to which Telef�nica will bring its extensive track record in integrating acquisitions and capturing synergies, will be the largest integrated operator in Brazil by all key metrics: by customer numbers (69.2 million to March 2010), revenue/OIBDA (11.8 and 4.1 billion euros in 2009, respectively) 1, and profitability (OIBDA margin 2009: 35%).

Chairman of Telef�nica, Cesar Alierta, said of the outcome: "We are delighted to have reached this agreement with Portugal Telecom which benefits both companies shareholders. It is a unique value creation opportunity. Vivo leads the Brazilian mobile telephony market, a market to which Telef�nica is strategically committed." ... > More