Ofcom takes wind out of BT's sails

Only a day before BT is to announce its annual results, Ofcom has revealed the telco's shrinking revenues and market share in a market that is also contracting.

The Fixed Telecoms Market Information Update reveals that BT has slipped under the 50 per cent mark for business calls revenue for the first time. It takes only 48.9 per cent of the cash spent on business calls.

Its share of revenues from households has slid over two per cent to 69.4 per cent and mobiles are cutting the whole market in fixed-line telecoms, which dropped five per cent to £12bn in 2003.

Jan Dawson, senior analyst at Ovum, said: "This is pretty predictable. BT is a pretty profitable company, but it's shrinking. It's not losing access market share but is losing call revenues. When wholesale line rental comes in this will change."

The Ofcom figures show a generally shrinking fixed-line market. Access revenues remain stable at £4.6bn but the spend on calls in general is down eight per cent to £7.4bn. Household spending on calls dropped five per cent to £4.3bn and business dropped their spending by 12 per cent to £2.9bn.

According to Ofcom, the figures reflect the rapidly growing move to broadband.

BT recently announced that it was slashing charges for ADSL connection and that it was making a move, in concert with Vodafone, back into the mobile market.

Dawson said: "BT is doing the right things in mobile, in broadband and in ICT. It remains to be seen if it'll come through fast enough to counter its drop in revenue elsewhere."