BT faces ‘challenging’ times as revenues dip
Pre-tax proft up, though
BT is feeling the heat from increased competition and lower pricing, the UK's dominant telco admitted today.
Publishing Q2 results for the three months to the end of September, the company reported that turnover had fallen by two per cent to £4.57 billion.
In particular, revenues in BT's traditional phone business fell six per cent as more and more people opt for rival operators such as Tesco, One.Tel and, more recently, Tele2. Cuts in fixed-to-mobile termination rates, imposed by the regulator Oftel, accounted for more than half of the decline in group turnover.
Despite the fall in revenue, the telco's pre-tax profit was up seven per cent at £529 million. While BT's core business is being squeezed, it reports that turnover in "new wave" areas - which includes broadband - rose 25 per cent to £761 million.
Indeed, the company now has more than 1.5 million ADSL connections, three times the number a year ago. As a result broadband revenue increased to £106 million from £45 million.
BT's chairman, Sir Christopher Bland, said that it "continues to be a challenging year for our traditional business" before adding that its "new wave businesses are delivering strong growth".
BT has also reduced its debt mountain - which at its height stood at £30 billion - by 33 per cent over the last year to £8.8 billion. ®