BT punters flee

One hundred thousand people a month are ditching BT and opting for alternative telephone providers as the UK's dominant fixed line telco admitted that the business environment "remained challenging". BT's share of home phone users fell by 1.5 per cent to 66 per cent in the three months to the end of June, as the former monopoly continued to lose ground to rivals.

Of course, BT is happy to point out that 100,000 punters a month are returning to the telco. It's less keen to let on that 200,000 customers a month are turning their backs.

Increased competition in its traditional business — as well as a massive jump in redundancy costs - led to a fall in pre-tax profit (before goodwill amortisation and exceptional items) as its slipped 13 per cent to £434m from £501m. Turnover was a smidgen lower at £4.57bn.

WBT's traditional business continues to get a beating as punters turn to alternative providers such as Tele2, One.Tel and the Carphone Warehouse. But it continues to make advances in "New Wave" business areas such as broadband and ICT, which saw turnover rise 32 per cent to £936m.

As of the end of June, there were 2.7m ADSL lines in the UK, an increase of 154 per cent compared to the same time last year, with the number of new broadband punters increasing by 36,000 a week. But even as more and more punters turn to broadband, it's not all good news for BT. For while BT Retail's share of ADSL punters hit 1.1m, it's share of new sign-ups slipped to just three in ten.

Confirmation of this from BT's own figures confirms a recent analyst report which highlighted that BT Retail had lost broadband market share during every quarter for the last two years.

Despite the continuing pressures on BT, the company remains upbeat.

Said chief exec, Ben Verwaayen: "The transformation of our business continues at pace. This is the second consecutive quarter of underlying growth in turnover. New wave turnover, including ICT, broadband, mobility and managed services grew by 32 per cent to £936m. New wave businesses generated over 20 per cent of group turnover in the quarter. This strong growth in new wave has offset the decline in turnover from the traditional business and these results reflect a continuation of recent trends."

By mid morning shares in BT had fallen 5p (2.57 per cent) to 189.75p. ®

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