BT Tries to Prove its Indispensable – Shows GBP18bn UK Economic Boost

BT has launched a new salvo in its efforts to defend against calls for them to be split from control of their national telecoms network by highlighting the results of an “independent” study, which found that the operator is responsible for generating £1 in every £80 produced in the United Kingdom.

The national telecoms regulator, Ofcom, is currently conducting a Strategic Review that among other things must examine the question of whether or not to separate Openreach from BT and in so doing turn it into a completely separate organisation (here).

The operators rivals, such as Vodafone, TalkTalk and Sky Broadband, want to see this happen more than most because they claim that BT has abused its dominant position in the market, under-invests in the national infrastructure and doesn’t provide a good quality of service (here). Mind you it’s unclear whether all of this could be improved by splitting BT and there are many complications to consider (debt, pensions, jobs, legal challenges etc.)

In the meantime BT has been trying to convince both Ofcom and the public at large that they’re a safe bet for the future, not least by touting their future plans to continue improving national broadband speeds / coverage (here) and calling for related regulatory changes in their favour (here).

Today that fight back continues with the publication of a new report from Regeneris Consulting, which was naturally conducted on behalf of BT and thus seems designed to help fuel a bit of positive spin; albeit spin with a powerful economic message or warning, depending upon your perspective.

Report Highlights

* BT is responsible for generating £1 in every £80 produced in the UK. The communications company spent £6.5 billion with UK suppliers during the 2014/15 financial year and gave an £18 billion boost to the country’s economy.

* It’s estimated that the equivalent of 217,000 full-time UK jobs are supported through BT’s direct employment, its spending with contractors and suppliers and the spending of employees (this is broken down a bit more below).

* BT employs 72,200 people in the UK and 10,900 contractors with a total employment income of £2.9 billion.

* BT provides work for a further 134,100 through BT’s spending with businesses that supply its equipment and services, and the spending of employees.

* BT people committed more than 50,500 volunteering days to worthy causes during 2014/15 – worth more than £15 million.

* BT has enabled more than three-quarters (77%) of its employees to work flexibly.

* In addition to its multi-billion pound roll-out of “fibre broadband” (FTTC/P), BT claims to consistently be one of the country’s leading investors in innovation with spending on research and development in the 2014/15 financial year reaching £502 million.

Put simply, BT is really big, which we already knew.

Brendan Dick, Managing Director of BT Regions, said:

“There are few organisations that have a larger impact on the day-to-day life and future prospects of the UK than BT. We are one of the country’s largest private sector employers and investors – our investment in fibre broadband alone amounts to more than £3 billion – and the services that we provide are a vital part of every community.

The facts and figures shown in this report highlight the full extent of BT’s contribution to the economy as we go about the daily business of keeping people connected and introducing new technologies, which are creating fresh opportunities and transforming lives.

Aside from the company’s activities, the report also draws attention to the positive ways BT people are contributing to the communities where they live and work, whether they are a volunteer for a worthy cause or a local shopper.”

Mind you none of this will do much to dampen the frustrations and complaints that have been raised against the operator, be they from rivals seeking to have a greater influence upon the market or rural communities that have grown tired of waiting for better broadband connectivity to arrive and which don’t want to be fobbed off with Satellite.

Never the less BT’s economic and employment impact upon the UK will certainly be something that Ofcom takes seriously and today’s report merely underlines that fact. Mind you it could also be argued that an independent Openreach division might well need to employ more people in order to improve service quality, which in turn may result in higher prices for consumers.

Certainly it’s not as if separating Openreach would suddenly result in a huge loss of all that economic impact, but as ever the outcome will depend entirely upon Ofcom’s chosen approach.