BT Business arm optimistic for 2007

BT says converged communications services will halt the slide in revenues at BT Business

BT Business, a subsidiary of BT Retail, says it is no longer a company in decline, with a combination of lower operational costs and clearer market strategy expected to arrest falling sales revenues.

The company has published better than expected revenue forecasts for 2006/2007, decreasing its total year on year revenue decline from six percent in 2005/2006 to a three percent decline in the first half of next year. A substantial part of that revenue growth is predicted to come from the delivery of managed IT services to smaller companies, it said today.

The telco has invested a lot of time and effort in building converged communications packages and solutions designed to take the management and configuration strain off IT departments. It is backing up a more focussed sales strategy with £100m of development funds in new products like Fusion and Vision, and a glut of technology partners and support staff.

BT Business managing director, Bill Murphy believes a potential £8bn market for hardware, IT services, devices, installation, applications and software is at stake, but concedes that BT is not best known for its managed IT strengths.

"We have to build up our brand in the IT services arena. There's still a lot to do but we're getting there. You wouldn't think that BT would do remote PC support, for example, but that is what is happening," he said.

The telco faces tough competition in the retail broadband market however, where 'free' triple play services offering fixed and mobile voice minutes alongside data connections are consistently driving prices and profit margins downwards.

"There are a lot of free [broadband] offers, but business people know that there is no such thing as a free lunch. Vodafone, Orange and 02 will all offer similar packages, and it's going to get wonderfully competitive. It's not going to be easy but I think we can compete," said Murphy.