BT Increases Profits, Broadband Market Share

Ambitious fiber broadband investments appear to be paying off, as 51% of British broadband users are now BT customers.

Gary Flood, Contributor

May 10, 2013

3 Min Read

BT, Britain's biggest telco, is upping the ante in its battle for cyberspace and broadcast market share against rivals BSkyB and Liberty Media's Virgin.

The company on Friday reported better-than-expected profits (compared to City of London projections) for the fiscal year ended March 31. In pounds and pence terms, that's an adjusted EBITDA profit up 2%, to £6.2 billion ($9.5 billion) for the full four quarters, with a 21% jump, to £833 million ($1.3 billion) in the first three months of 2013.

But while improved, the top-line numbers have not fully shaken off five years of underperformance by the formerly state-owned company. The firm has not managed to get revenue growing again, with this fiscal year coming in down 5%, at £18.3 billion ($28.1 billion).

The firm says it also has driven up its fiber broadband customer base -- in both business and consumer markets -- to the 1.3 million mark. BT says the total number of U.K. broadband connections (including DSL and fiber) on its network is now 17.6 million, delivered through more than 150 service providers. In terms of market share, after adding 424,000 retail broadband customers in the year (increasing its customer base 7%, to about 6.7 million), it now has the majority share at 51% of all British domestic connections.

[ "Copper Luddites" are trying to hold back progress, claimed BT chief. Read BT CEO Slams U.K. Fiber 'Monopoly' Critics. ]

BT also announced plans to use its burgeoning video on demand (VOD) business, BT Vision, as the platform to turn itself into a full competitor with Rupert Murdoch's Sky TV via a £1 billion ($1.5 billion) investment in securing the rights to stream Premier League soccer for the first time.

That's a move also seen as building demand for the company's fiber network, which it built out the last few years, despite the post-2008 U.K. economic slowdown. During the results call, the company claimed its high-speed fiber offering is now available to more than half of British homes and businesses, with rollout accelerating in rural areas.

For BT CEO Ian Livingston, that fiber groundwork shows how "in an environment where it is easier to focus only on the short-term," his company is "investing in our future."

Livingston also said that the firm has created around 3,000 new jobs in the U.K. during the last year to support its investment plans, and plans to will use its Wi-Fi capabilities and recent LTE/4G spectrum bandwidth purchase to "make sure its customers will be the best connected." BT, for the first time, revealed what it spent on that purchase: £202 million ($311 million), which it says will provide its business and consumer customers with an enhanced range of mobile broadband services.

Beyond communications infrastructure and services, the firm is also a contender in the IT consulting and system integration market with its BT Global Services arm. That also seems to be on the way back to health, with an order intake of £2 billion ($3.1 billion), the company said.

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