News

Broadband bumps up BT revenue

BT has reported a slight increase in revenue for its second quarter of 2004, but cited strong growth in its "new wave" technology segments, including broadband, mobility and managed services.

The UK telecommunications company reported group revenue of £4.6bn, up 1% from the £4.57bn earned in the same quarter last year. Net profit before taxation, goodwill and exceptional items came in at £549m, an increase of 4% from the £528m reported for the year-ago period.

BT chief executive Ben Verwaayen said that new wave revenues helped the company post the best underlying revenue growth it has seen in three years, despite the ongoing decline in the company's traditional fixed-line business. That underlying growth is allowing the company to give shareholders an interim dividend of £0.039, Verwaayen added.

Revenue from new wave segments added £1bn to BT's coffers in the quarter, up 36% from a year ago. New wave revenues accounted for 22% of the group's total second-quarter revenues, BT said.

The company said that it had an installed base of 3.3 million wholesale broadband lines by September, an increase of 146% over last year.

Additionally, BT's Retail division said that it saw its broadband revenue jump 81% in the quarter, to £123m. BT Retail has been notching down prices on its BT Broadband and cobranded BT Yahoo services in recent months to lure customers.

BT's traditional businesses, including its fixed-voice offerings, declined 6%, however, due to increased competition, price reduction and regulatory intervention, it said.

The company expects to see continued challenges in its traditional business, but is optimistic about benefits from its investments in new wave technologies.

Additionally, it sees strong growth potential in the IT and networking services category as it banks on its buy earlier this month of US-based Infonet Services.

Infonet has operations in over 70 countries and BT hopes the buy will also aid its global expansion efforts.

BT is also working on driving down its net debt, which decreased to £8.3bn at the end of the second quarter from around £8.8bn a year ago.

Scarlet Pruitt writes for IDG News Service

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