BT profits boosted with increased broadband subscribers

The past few months have been a whirlwind of events, both good and bad, for BT Broadband. BT has been a major player in the UK broadband industry and is taking the lead in bringing fibre technology with their announced Fibre-to-the-Premises (FTTP) technology. The broadband giant had previously announced that they would complete the deployment by 2015, but revealed just recently that they were working ahead of schedule and would finish setting up the FTTP technology by 2014. BT had earlier stated that the new timeline for their fibre technology deployment “will help the government achieve its ambition of having the best super-fast broadband network in Europe by 2015.”

BT’s pay-TV service, BT Vision, also reported some good news with an increase of 41,000 subscribers in the third quarter of this year alone. This figure was all the more notable as their main competitor, BSkyB, only posted a growth of around 26,000 subscribers.

But with the good comes the bad. Earlier this quarter, BT Broadband was hit by several outages and blackouts, where one was attributed to problems at an exchange in London and another was due to a power failure at an exchange in Birmingham.

However, BT Broadband revealed more good news today, to the delight of their investors. Pre-tax profits for the past three months until the end of September were posted at £552 million, which was 36 percentage points higher than the figures they reported last year. During the third quarter, BT Broadband was able to aggressively take on and add 166,000 new retail broadband customers, pushing the overall number of subscribers to approximately six million.

BT chief executive, Ian Livingston, stated: “We have increased cash flow, profits and underlying revenue. We achieved a market leading 63% share of broadband net additions and another quarter of growth in fixed lines.”

BT confirmed that they expected to be able to hit the project full-year profit targets as well. The reported figures were much better than investors had initially expected, and BT shares rose 2.7% at Thursday’s close.

Head of equities at Hargreaves Lansdown Stockbrokers, Richard Hunter, added: The reiteration of full year guidance has been well received, underpinned by particular strength in broadband and at its once beleaguered Global Services division.”

Source – BBC