BT rung up a 56 per cent increase in pre-tax profits during Q1 even though turnover remained flat at the UK's dominant telco.

The improved figure comes as BT continued to sit on costs such as property and IT.

In the three months to the end of June, pre-tax profit was £502 million ($811.5 million), compared to £322 million ($520.5 million) in the year before. Group turnover remained flat at £4.59 billion ($7.42 billion).

BT saw a three per cent drop in the group's core business but this was offset by a 23 per cent growth in new wave revenues - areas such as ICT, broadband and mobile. The consumer sector has shown continued growth although revenue from SMEs declined, the company said.

In a statement. BT's chief exec., Ben Verwaayen, said: "Our focus on financial discipline, defending our core business and creating new business streams continues to deliver results."

One of those new revenue streams is broadband. As of the end of June BT had 1.06 million wholesale ADSL lines with orders increasing by more than 25,000 a week.

BT's retail broadband services - in the shape of BT Broadband and BT Openworld Broadband - account for half of all ADSL connections in the UK boasting a combined customer base of 536,000 at June 30.

Shares in BT fell in early trading down 7p (3.42 per cent) at 197.5p. ®