Feeds

BT net income rises 70%

Hurrah

  • alert
  • submit to reddit

Choosing a cloud hosting partner with confidence

The UK's biggest phone company, British Telecom, has posted a 70 per cent rise in profits, driven in large part by sales of overseas businesses.

Net income during its fiscal third quarter climbed to £653m, or £0.076 a share, from £385m, or £0.044 a share, a year earlier. A huge proportion of the profits came from the sale of BT's stake in two businesses, Eutelsat and Starhub, which brought in £284m. Sales rose to £4.584bn from £4.578bn a year earlier.

"Our transformation strategy has now delivered underlying revenue growth in four consecutive quarters, a significant milestone," said BT CEO Ben Verwaayen. "We have seen new wave growth of 35 per cent," he added, referring to non-traditional telecoms services like DSL broadband.

He said that broadband DSL connections amounted to more than 800,000 in the quarter, equating to a new connection every 10 seconds of every day. "We expect to achieve 5 million broadband DSL connections a year ahead of target," he predicted. The BT chief also pointed to the firm's growing Global Services business, which saw revenues rise by 10 per cent in the quarter.

Like most other traditional telecoms companies, BT faces fierce competition from smaller rivals as well as from mobile operators, which are stealing customers at a steady pace. To fight back, the company has turned to so-called new wave businesses, such as broadband, virtual mobile phone services and IT services.

Blazing this new trail has not been easy for BT nor for any of its peers in Europe, which have been forced to spend vast sums to upgrade their networks for high-speed internet. Former telecoms monopolies are also under the scrutiny of regulators such as the UK's Ofcom, which recently threatened to split BT in two if it did not become more cooperative in allowing competitors to access its network.

Overall, BT's new wave revenues were up 35 per cent to £1.12bn, while traditional revenue fell by about eight per cent. However, the results also showed that earnings before interest, tax, depreciation and amortisation slipped to £1.44bn from £1.47bn, which has been taken as a sign that the firm's huge investment in broadband infrastructure, new services and marketing has cut into margins.

Also on Thursday, in another sign that BT is committed to making a profit from broadband, the company said it would double the speed of its basic broadband service to 1Mbps, with its higher-grade service now running at 2Mbps. No pricing changes for the services were announced.

"BT is about giving value for money," said Ian Livingston, CEO for BT Retail. "Today we are offering customers up to four times the broadband speed without charging a penny more. It will allow customers to get even more from their broadband services for entertainment, education or communication."

© ENN

Related stories

BT retail DSL market share slips some more
BT in 2Mb broadband giveaway
UK LLU roll-out 'continues to lag'

Beginner's guide to SSL certificates

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
Lawyers mobilise angry mob against Apple over alleged 2011 Macbook Pro crapness
We suffered 'random bouts of graphical distortion' - fanbois
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
US court SHUTS DOWN 'scammers posing as Microsoft, Facebook support staff'
Netizens allegedly duped into paying for bogus tech advice
Feds seek potential 'second Snowden' gov doc leaker – report
Hang on, Ed wasn't here when we compiled THIS document
Verizon bankrolls tech news site, bans tech's biggest stories
No agenda here. Just don't ever mention Net neutrality or spying, ok?
prev story

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
New hybrid storage solutions
Tackling data challenges through emerging hybrid storage solutions that enable optimum database performance whilst managing costs and increasingly large data stores.
Mitigating web security risk with SSL certificates
Web-based systems are essential tools for running business processes and delivering services to customers.