Broadband fails to lift sales gloom at BT

A STRONG quarter for BT's broadband business failed to lift its overall sales as fewer customers turned to the telecoms giant for traditional landline services.

Although group revenues dipped by 3 per cent to 4.98 billion in the three months to 30 September, underlying pre-tax profits were up 13 per cent at 496 million, beating market expectations.

The telecoms giant said 253,000 broadband customers were added by companies using its network during the period - nearly double the 169,000 gained last year - and 45 per cent of those connected using BT's own broadband service.

Its broadband television offering BT Vision added 24,000 customers in the quarter, up by a third, bringing the total to 520,000.

The results prompted BT to raise its forecast for full-year underlying earnings to 5.8bn, up from an expected 5.6bn.

BT returned to profit earlier this year after driving down its costs, mainly through major job losses. It continued to make labour savings in the second quarter by employing fewer contractors and third parties.

Scots-born chief executive Ian Livingston said that the roll out of BT's high speed fibre-based broadband, BT Infinity, would be key to lifting sales.

It currently has 38,000 customers, increasing by around 4,000 per week. Livingston said while Sky Sports had only been taken up by 10 per cent of BT Vision customers, the product was a "long term" investment and had more services to come, including 3D and high-definition.

BT has set targets to return to revenue growth by 2012/2013 on the back of expansion of services such as BT Vision and broadband. Shares in the firm closed up 9.7p at 169.1p.