Football helps BT sign more users

BT will screen 42 English Premiership matches in each of the next three seasons. Picture: Getty
BT will screen 42 English Premiership matches in each of the next three seasons. Picture: Getty
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BT’s multi-billion pound investment in sports broadcasting is continuing to bear dividends as the company captured more than half of the new fibre internet connections on its network in the last quarter.

The group, which is betting on Premier League and other football rights to drive its underlying consumer business, signed up 266,000 homes to its super-fast broadband service during the three months to the end of March. This was more than half of the 455,000 new connections during that period to the fibre network, which it shares with rivals such as Sky and TalkTalk.

In addition, BT added 121,000 standard retail broadband customers, putting it ahead of Sky, TalkTalk and Virgin for the seventh month in a row.

The strong performance from the consumer division offset weakness elsewhere as BT posted a better-than-expected full-year profit of £3.17 billion, up 12 per cent on the previous year.

Earlier this year, the group paid £960 million for the right to broadcast 42 English Premiership games in each of the next three seasons. It offers these games at no extra charge to its broadband customers.

Pressed on whether BT might in future charge for its Premier League games, chief executive Gavin Patterson said he could “not rule it out forever”. The group has already confirmed that it will begin charging for Champions League football – the rights to which cost BT £897m – with pricing to be set later this year.

The number of paying television customers rose by 52,000 in the final quarter to a total of 1.14 million. Meanwhile BT’s sports channels – which are bundled into Virgin Media packages and are free to Sky homes that take BT broadband – have an even wider distribution into 5.2 million homes.

The group, which is buying mobile network EE for £12.5bn, said its consumer mobile service launched six weeks ago has signed more than 50,000 new customers. The EE deal was passed by BT shareholders last month, and is awaiting approval from the Competition & Markets Authority.

All together, the consumer division grew operating profits by 32 per cent to £614m. Revenues rose by 7 per cent to £4.02bn.

However, declines were recorded elsewhere, with BT Business hit by lower call and line volumes as customers shifted to using internet services. Revenues in the wholesale Openreach division fell in part because of regulatory price changes, and the Global Services division was weighed down by a decline in UK public sector revenue.

Welcoming the overall result as a “ground-breaking year”, Patterson said BT will now focus on improving its customer service. This follows the addition of 2,500 new engineers and 500 extra call centre staff.

“We have increased the speed of service delivery, repaired faults faster and fixed more customer issues first time,” he said. “But we recognise we’re not yet where we want to be and this will continue to be a priority for us.”

BT also proposed a 14 per cent increase in its full-year dividend to 12.4p a share.

Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said: “BT is held in high regard by the market and these results provide a reminder as to why this is the case. In terms of strategy, the jigsaw is slotting into place.”

He said the group was set to have market-leading positions in three of the four “quad play” offerings of fixed line, mobile, broadband and TV.

“Even the fourth, namely TV, will have exclusive Champions League football in addition to the Premier League rights recently negotiated. As such, the overall quad play bundle will become an increasingly compelling offer for consumers.”