More than a sporting chance: BT Retail increases its broadband share

Ian Scales
By Ian Scales

Jan 31, 2014

BT Group has today announced bumper numbers: pre-tax profits of £617 on revenues of £4.6 billion and its broadband numbers (both for Openreach and Retail) growing strongly to take a greater share of the UK broadband market.

The group claims it’s just had a record quarter for fibre broadband demand, with 1.9 million of its 7.1 million customers taking the faster service.

The numbers are being claimed as a major endorsement of BT’s sports media strategy which has seen it expand its sports rights portfolio. BT sports is offered free to BT broadband customers and most recently BT won the rights to screen the Champions League and Europa League matches for three seasons from 2015-16.

BT has also been heavily promoting some cut-price offers for its broadband services, so exactly where price kicks in and sport kicks off must remain unknown, especially as BT’s most recent media buys don’t activate until next year.

What’s not in doubt, however, is that its activities are improving BT’s competitive position in the UK market. Openreach (BT’s infrastructure arm) added 252,000 new customers during the last quarter (up 4 per cent on the 243k it added in Q2 last year). Better yet, BT Retail won 60 per cent of that total, with 150,000 net additions (up 23 per cent on Q2 last year). Sky added 110k new broadband customers in the same quarter.

According to veteran industry analyst Chris Lewis, of Lewis Insight, BT Retail’s strategy to build a media business is brave: “I’m really happy for them,” he tells me. “It’s not something that telcos have been particularly good at to now. And it’s doubly brave when you consider that BT is doing this in the UK which already has strong media competitors with Sky (satellite) and Virgin (cable).”

From a brand point of view he thinks telcos just have to do something to maintain visibility. “We need strong telcos and they have to be more than mere utilities.” Certainly that’s what BT in particular, without a mobile arm and ‘separated’ from its infrastructure business, was always in danger of becoming.

“What you need is visibility, something concrete that people can associate the brand with. Of course that concrete thing used to be a telephone, but now you need something up-to-date… a reason to think of 'BT' for your broadband before any other provider. So now, when you go into BT head office there are screens everywhere with football on them…. that’s an association (no pun intended) that can lodge in the brain. “

Follow the writer on Twitter @ ian_TTV

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