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Report Claims BT Generates £1 in Every £75 Produced in the UK

Tuesday, February 5th, 2019 (10:52 am) - Score 3,172
bt people uk map

A new report from Hatch Regeneris, which was commissioned by the BT Group, has estimated that the telecoms and broadband ISP giant generated a £22.8 billion contribution to the UK economy (expressed as GVA – Gross Value Added) during the 2017/18 financial year (down from £23.1bn in 2016).

The report also notes that in the last financial year BT Group paid £1.1bn in taxes and were the 5th highest tax contributor in the United Kingdom (behind banks including HSBC, Lloyds, Barclays and RBS – according to PWC), although we should point out that the impact of this tax contribution has not been assessed in this report.

Otherwise the £22.8bn figure mentioned above appears to combine the direct, indirect and induced impacts of BT Group’s activities and spending across all of their divisions (e.g. Openreach’s fixed line infrastructure, BT Consumer, EE’s mobile network etc.).

Overall some of the key highlights include their £9.2bn spend with UK based suppliers (down from £9.3bn in 2016) and the £3.4bn total income (before tax) of their employees (up from £3.2bn in 2016). The full report also includes a region-by-region breakdown of their impact.

bt group 2017 to 2018 economic impact

By comparison in 2016 the operator reported 81,400 employees directly working for BT Group and 10,600 contractors (Full Time Equivalent), with 259,000 total FTE jobs supported (including indirect and induced effects). Much of the increase in the 2017/18 report has of course come from Openreach’s on-going move to hire thousands more engineers to help support their FTTP and G.fast broadband deployments.

Jane Wood, BT Group UK Nations and Regions Director, said:

“Few companies play as important a role in national, regional and local communities as BT Group. Not only does BT connect friends, families and businesses across the UK, but we also put premium fuel in the tank of the nation’s economy. The report shows that BT generates £1 in every £75 of wealth in the UK.

We’re proud to be one of the UK’s largest private sector employers and investors. Our investments, including the latest 5G mobile technology through our mobile network EE, will ensure the UK continues to be one of the world’s best-connected economies.

With more than 82,500 directly employed people spending their salaries in local businesses, from Shetland to the Scilly Isles, as well as regularly volunteering on activities such as our Barefoot tech literacy programme in schools, our people are at the heart of nearly every community.”

The study also claims that BT Group is the 4th highest payer of UK wages and salaries (out of the PWC Total Tax Contribution of UK FTSE100 companies 2018), the 2nd highest overall distributor of “value” into the UK (i.e. the sum of taxes borne, taxes collected, wages and salaries paid, interest paid, and equity returns etc.) and the highest capex investor. The latter is no surprise given that they have the biggest overall fixed line and mobile network.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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24 Responses
  1. Avatar Br0kenTelep0n3

    “highest capex investor” – really? More than the road highways, more than the electricity grid, more than the railways? Subtract the BDUK money and is that statement still true? And Deutsche Telekom and Orange paid for the EE network.

    • Avatar JamesMJohnson

      Not sure about the highways but both the energy grid and railways are “regionalised”.
      The energy grid is owned by SSPN (Scotland), NPG, WPD, UKPN and a few others.
      The railways are owned by 9 companies (might be slightly off here but it’s about that).
      The telecoms however are nationally owned by Openreach (except KCOM in Hull I think).
      The footprint is vastly different.

    • Avatar davidj

      The railways have 23 franchise operators and 32 Operating Companies. This excludes Freight Operators.

      In passenger fairs alone the rail companies combined took over £10 Billion.

      Network Rail track and other infrastructure owner an additional £6.5 Billion.

      Third Party Investors are responsible for Estimated £2 Billion

      Fright Companies an additional £1.7 Billion

      That little lot alone is already close to BTs total and ive not even got into rental for station operating companies which are Non-Network rail owned.

      Or the rental from businesses that trade in those stations (think WHSmith, Starbucks etc). Or Eurotunnel, Engineering contracts and a whole bunch more…….. The rail network is not just little choochoos going along a track.

      Of course this was a BT commissioned report…. OR a here’s some money jot some figures and “facts” down on a fag packet so im not surprised at the ludicrous claims.

    • Avatar CarlT

      They didn’t say that.

      ‘We’re proud to be one of the UK’s largest private sector employers and investors.’

      One of the largest and they specified private sector. Network Rail are public sector. Much of the major road investment is by another public sector body, Highways England.

      Whoever built EE is past tense, the statement was present tense.

    • Avatar davidj

      According to your quoted statement it does not matter, who owns the company. BT did not claim they are one of the biggest PRIVATE COMPANIES they claimed as you quoted…
      “one of the UK’s largest private sector EMPLOYERS”

      Network Rails main customers are the privately owned train-operating companies. Or in simple terms They employ PRIVATE SECTOR companies.

      It should also be noted if you think public or private ownership is a factor in this debate the news item also states.

      “Otherwise the £22.8bn figure mentioned above appears to combine the direct, indirect and induced impacts of BT Group’s activities and spending across all of their divisions ”

      So i trust that includes BDUK and similar money, which is what private or public funds eh?

      Then there is the fact BOTH companies (BT and Network rail) have previously been both private and public ownership. So if we want to go your route and want a ‘real’ break down like for like id guess we would have to asses who made what when public and when private. Hint they do not wint then either.

    • Avatar Robert

      With regards to employing Private sector Organisation and or Personnel, BT and Network Rail are not that different. Both for example made use (employed) the failed Carillion for projects. Im sure there are other numerous examples where their employing overlaps.

    • Avatar 125us

      I don’t think public spending counts as capex – a different measure is used – GFCF. Government investiture is only possible because of taxes paid by private businesses or the people who work for them.

    • Avatar davidj

      Seems BT if the news item is correct have included their public spending in the figure.

    • Avatar CarlT

      Davidj what are you on about?

      Contractors aren’t employed by the companies they work with, they are their own entities.

      Do you think when you purchase services you are employing people? They work for their business and you enter into a relationship with that business as a customer, not an employer.

      You sign a contract to do business with an entity not employ them. You actually described the train operating companies as Network Rail’s main customers, although you did then claim there was an employment relationship there.

      BT’s BDUK projects also have partial funding from BT so they can legitimately claim some of it is their investment.

      Virgin Health aren’t public sector because they do work for the NHS. CityFibre aren’t public sector because they use local authorities as anchor tenants.

      The history of the companies is likewise irrelevant. BT made the claim in present tense.

      In any event BT’s capital expenditure is among the highest in the private sector, due in part to their being the incumbent telco. It’s the same story in all nations with a privatised single incumbent.

    • Avatar davidj

      “Davidj what are you on about?

      Contractors aren’t employed by the companies they work with, they are their own entities.”

      I did not mention anything about contractors did i?? so its me that has no idea what you are on about.

      “BT’s BDUK projects also have partial funding from BT so they can legitimately claim some of it is their investment.”

      Agreed SOME of its investment. However as i pointed out already the news item states.
      ‘..the £22.8bn figure mentioned above appears to combine the direct, indirect and induced impacts of BT Group’s activities and spending across all of their divisions’

      Or incase you missed it ALL not some spending.

      Speaking of which and switching back to the contractors thing. and to requote that again..
      ‘figure mentioned above appears to combine the direct, indirect and induced impacts of BT Group’s activities and spending across all of their divisions’

      You should air your opinion about what is public, private and employed vs not employed spending to BT as from that statement i assuming ALL SPENDING will include money spent on the likes of Quinn and Kellys (or contractors) that like to bodge things also. Unless of course they now work for free?

      You can argue with me about being right or wrong all you wish, im just basing anything i say on BTs own calculated figures.

  2. Avatar gerarda

    I wonder how much wealthier the UK would have been without the dead hand of BTs management and their reluctance to invest in ADSL, FTTC and FTTP.

    • Avatar CarlT

      I wonder how much happier you would be if you could get that immense chip off your shoulder.

      In the context of the regulatory environment BT weren’t especially reluctant and I think you wrote ‘BTs’ [sic] when you actually meant ‘Ofcom’s’.

    • Avatar Fastman

      complete stupid comments

      ignores the actual fact as ever (even though your a receient of a BDUK structure I understand

      no public funding on ADSL
      2.5 bn commercial money

      about 1.5bn matched to BDUK (not part of the 2.5bn)
      X million paid back in clawback

      now major investment in FTTP

      who else has invested anything like that (no one)

    • Avatar davidj

      gerarda…
      I have no love for BT or their obvious daft self submitted (or i hope it is) PR pieces that crop up on here but thats going a bit far.

      Back when ADSL was appearing there was basically nobody else around offering anything close (excluding what i think at the time was cable under the Telewest monocle, and that would had been in far few areas than today).

      At the time of ADSLMax (or 8Mb) they from memory had the fastest residential service in the country (until cable went from 5Mb to 10Mb) Even then it was still competitive and available to far greater numbers.

      BT up until around the time ADSL2+ started to appear WERE a great contributor to this country and did indeed drive forward. Somewhere in the middle of ADSL2+ life is when they seem to have lost their way in some fashion. MANY others beat them to offering ADSL2+ and BT for years for many were still only offering the prior ADSLMAX products. (all to do with exchanges and 21CN upgrades if i remember right).

      When FTTC was announced BT seemed to be getting back on the path of greatness, unfortunately for them but good for the consumer, others have done quite a lot in the past 10 years or so and competition continues. Bt have thus become far more (to be polite) selective, in delivering.

      As for FTTP well the less said the better, lets just say to meet their xxx million of premises ambitions they need to get a shift on.

      BT are far from the root of all evil, but lets just say sometimes they do thereself no favours.

    • Avatar 125us

      If BT chose not to invest and there was a return to be made, others would have invested. Very few have. Empirically that means the answer to your question is “no wealthier at all”.

    • Avatar davidj

      Others have invested in areas in addition to prior and current broadband tech before BT.

      In fact Dial-up was first introduced in the UK by Pipex in 1992.

      ADSL2+ was introduced by UK Online in 2005, BT did not get around to trials of that until 2007.

      There is no rhyme or reason to the way BT invest, sometimes they are first more often that not they follow.

  3. Avatar gerarda

    A few instances from my personal experience –

    circa 1997 I had to buy a server and bandwidth in the USA to support an ecommerce site as there US customers sessions were not restricted by dial up as was the case in the UK, and buying sufficient bandwith from BT was ludicrously expensive. At this time in the USA Amazon, Ebay and Google were beginning to flourish

    2001-2008 BT refused to roll out ADSL without getting triggers levels per exchange generated, despite Fastman’s assertion to the contrary, by publicly funded demand stimulation campaigns at a time when South Korea was already fully provided with high speed internet.

    2010 to date BT refused to roll out FTTC without public subsidy as they expected take up to be only 20% compared with the approaching 50% and rising as it is already.

    If, as all the evidence suggests and BT themselves claim, there is an economic benefit of some percentage of GDP following broadband improvement, then BTs reluctance to invest promptly has cost the UK economy many billions of pounds a year.

    On top of this there is the further unquntifiable cost of loss of competitiveness as indicated above.

    I don’t necessarily blame BT for this. The way their privatisation was structured gave them no incentive to act other than to protect their monopoly. However commissioning reports to suggest they have been good for the economy can’t go unchallenged

    • Avatar TheFacts

      @G – BT rolled out FTTC to many areas without public subsidy.

      The trigger level scheme for ADSL started and was then abandoned.

      In 1997 there were others like Cable&Wireless, what were their charges?

    • Avatar 125us

      All of this is only true if BT were the only company able to roll out a network. They weren’t, and aren’t. If there was a commercial case for investment and BT passed, someone else would have seized the opportunity. If no-one did, it tells you more about the market than it does about BT.

    • Avatar GNewton

      There is nothing to be proud of with regards to BT.

      Some posters believe that there are other telecom companies who could have invested into a fibre network, but these suggestions show that they must live a dreamland, because BT already had a near nationwide infrastructure in the form of telegraph poles, cable ducts, cabinets and exchanges, where most of which was originally financed by the taxpayers anyway.

      For any newcomer the situation will be significantly different, they’d basically start from scratch if they wanted to build a fibre network.

      Even now at this late stage its almost better to separate Openreach from BT and make Opereach part of an NBN style fibre network.

    • Avatar davidj

      “All of this is only true if BT were the only company able to roll out a network.”

      The modern private BT has not rolled out any “Network” unless you are counting the less than 1 million FTTP network.

      ADSL, ADSL2, FTTC are all delivered over a “Network” infrastructure (phone lines) which was mainly in place well before BT became private.

      The “Network” has had money spent being upgraded and expanded but a fresh new network from BT? Er NO except for the FTTP parts, the rest is just upgrades and expansions.

      1 Million premises for FTTP IMO is also nothing to be wowed about, considering that started near 10 years ago (When they claimed they were aiming for something like 2 Million premises well before now). If you compare how many properties Virgin have built a Network to in 10 years that 1 million figure it is laughable. BT have the largest workforce of any comms provider in this country and are still unable for most months unable to break 20,000 premises per month coverage.

      The 10 Million figure by 2025, if they actually achieve a ambition for once, will mean their FTTP “Network” has taken about 15 years total to reach only about a third of the countries premises.

      Others Like Voda/Cityfibre are aiming for around 5 Million in around 5 years (or if they continue after that aim at the same rate they would had done the same in 10 years or two thirds the time). They have probably less than half the staff, half the resources and are spending a heck of a lot less.

      BT and their modern “network” rollouts, timeframe wise have nothing to boast about. Why anyone let alone the countries biggest provider would be proud of a Network of 1 Million that has taken thus far near 10 years to get to that figure is beyond amusing.

  4. Avatar Fastman

    Gerarda you seem to have forgotten to mention you are a recipient of the bduk programme that you detest

    I assume you have not taken a fibre service and remained on adsl on principle

    • Avatar gerarda

      I dont detest the BDUK programme, however misguided and Openreach biased it was. I do detest having to wait 12 years for a decent service because of BT’s actions/inactions

    • Avatar TheFacts

      @G – why have other suppliers not covered your area, do you detest them as well?

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