Broadband victory for BT as Sky battle intensifies

Telecoms group BT claimed another victory in the battle for broadband as its new sports channels helped spur a surge in take-up and drove the best growth in consumer revenues for a decade.

BT: Broadband victory. Picture: PA

The group, which is locked in a fierce battle with broadcaster BSkyB, said it added 150,000 broadband customers in the latest quarter, with many lured in by a package including 38 top-flight football matches a season on its TV service.

Although the pace of growth slowed on the 156,000 new customers seen during the previous three months, it was still 23 per cent higher than a year earlier and beat the 110,000 broadband customers reported by Sky on Thursday.

BT said the performance helped consumer revenues rise by 6 per cent – the best for ten years – while it also saw the group return to overall quarterly revenue growth for the first time in four and a half years, up 2 per cent to £4.6 billion.

Underlying pre-tax profits rose by a better-than-expected 8 per cent to £722 million and the firm upped its full-year earnings guidance as it said cost-cutting efforts were offsetting its hefty BT Sport outlays.

The results are likely to be seen as a further vindication of BT’s recent strategy – slashing costs to enable the former state telecoms monopoly to invest in a multi-billion-pound roll-out of a fibre broadband network.

Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said: “BT is a company firing on all cylinders, with extra propulsion coming in the form of its high-profile entry into the TV sporting arena.”

BT chief executive Gavin Patterson said the profit figures proved “our strategic investments are delivering”.

There have been fears over the financial impact of the company’s recent sport deals after it forked out almost £900m in November to secure the UK rights to show Champions League and Europa League matches, which followed hot on the heels of its £738m deal for 38 live Premier League matches.

But the firm stressed yesterday that progress on cost savings would now see underlying annual earnings come in towards the top of the expected range of between £6bn to £6.1bn.

BSkyB fought back earlier this week having been left reeling recently after losing out on the key football rights to BT, hailing “explosive growth” for its on-demand TV service and announcing a new five-year deal for the exclusive rights to the entire HBO TV catalogue.

BT noted that it had attracted more than 1.5 million viewers for two football matches over the festive quarter – Manchester City v Liverpool and Manchester United v Spurs.

It currently offers BT Sport free to broadband customers, except those who have signed up for high definition, but experts expect the group to be forced to start charging to recoup its costs.

The group remained tight-lipped on future plans to change the offer, but confirmed it will start charging for full access to Champions and Europa League matches in 2015-16.