Selling off the Family Silver12 Nov 2018 07:54
It looks like BT is engaged in yet another selling off of family silver. Ater the announcement of the sale of BT Fleet last week. This time the Financial Times is reporting is the intentionto reduce the size of Global Services by reducing it's customer base from 5200 to 800!
Perhaps thinning down to reduce overlap with DT?
Extract here;
BT’s international business is intending to shed more than 80 per cent of its customers as part of its attempts to move on from a significant accounting scandal uncovered at BT Italia in 2016.
Bas Burger, a Dutch industry veteran who was promoted to run Global Services in May last year in the wake of the scandal, plans to radically slim down the business, selling off its array of local networks and reducing its customer base from 5,200 companies to the 800 biggest and most profitable.
“We will become a smaller company, leaner and partnership-driven,” Mr Burger said. The business has had to change its focus from providing a range of outsourced telecoms to cloud computing services, he added. The new strategy reflected a change in customer needs, Mr Burger said.
Large companies once outsourced everything from desktop telephones to broadband access; now, they develop their own apps or use cloud-based services. “It’s about delivering the availability of those apps. We are not building them, developing them or even coding them. The differentiator will be that we are everywhere in the world,” he said. Mr Burger said that he expected the shift to be complete within three to five years. About 70 per cent of Global Services’ revenue base is either not growing or in decline, and Mr Burger said sales growth was “less of a topic” compared with a promise to double returns within two years. In the first half of this year, revenue fell 7 per cent to £2.3bn while earnings before interest, taxation, depreciation and amortisation surged 35 per cent to £208m.
Mr Burger said he had been shocked by the Italian scandal and has led a process to improve controls across BT’s international operations. “We need to triple- and quadruple-check to minimise the chances of that happening again,” he said, although he added that there had not been much of a backlash from customers in response to the scandal, which emerged after a whistleblower contacted senior BT managers with a series of claims about how BT Italia’s accounts were being prepared.
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