BT services on the rise

BT’s outsourcing arm, BT Global Services, is now the largest division in the BT group following a three per cent rise in second-quarter sales to £2.2bn.

The division, which serves major business and government sectors, overtook BT Retail, whose sales to consumers and small businesses dropped to £2.1bn.

But while Global Services increased second-quarter orders to £1.6bn, traditional UK sales, including voice and dial-in IP revenues, fell eight per cent.

Ovum analyst Phil Codling says the results reflect the importance of BT’s presence in the corporate and government sectors.

‘Consumer customers now contribute just 25 per cent of BT revenue. Improved focus on multi-site organisations and international capability is helping Global Services to articulate its position and value,’ he said.

‘But the division faces significant challenges as it tries to grow, not least the need to manage a declining business in the UK.’

Codling says there are opportunities in IP networking and network outsourcing, but BT’s growth from such business is just six per cent.

Much of the second-quarter growth has been driven by partnerships with companies including Pepsi and Capgemini.

‘Partnering is a critical skill in today’s market, but BT cannot let itself become just a subcontractor,’ said Codling. ‘We expect to see it marshalling resources and friendships to compete for big and difficult contracts.’

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