Revenues down, profits up and fibre future as “economic headwinds” hit BT

Editor ©RapidTVNews | 03-02-2012

Fibre based networks, supporting high-value applications such as IPTV, will form the future bedrock for BT as the company looks to come out of difficult trading conditions.
For the third quarter of its financial year ended 31 December, BT posted revenues of £4.774 billion, a fall of 5% compared with the period twelve months earlier. Theses were the driver for EBIDTA of £1.524 billion, a rise of 3%. For the nine month period, the respective figures were £14.43 billion (down 4% on Q3 2010) and 4.455 billion (up 3%).
Attempting to put a bullish spin on the news, Ian Livingston, BT Chief Executive said:
“We have delivered another quarter of growth in profits and cash flow despite the economic headwinds.”
For the Retail division, responsible for the BT Vision IPTV offering in the UK, revenue decreased by 5% reflecting, BT said, the on-going decline in calls and lines revenue and lower IT hardware sales. Yet overall the company insisted that the operating metrics for the consumer division were encouraging and claimed that the uptake of BT Vision had maintained good momentum with net additions of 39,000 in the quarter. As a result consumer ARPU was up 5% reflecting the increased take up of broadband and BT Vision.
Casting his eye on the Q3 results, David Molony, principal analyst at Ovum said: “There remain strong fundamentals within the business, in particular BT Retail which continued its impressive broadband growth, as well as making strong additions to its Vision and Infinity subscriber bases. However, it's financials show how much of a challenge it faces in transforming its business, and why it's so important for BT to continue to change its service mix.”
Looking forward, BT also announced that it had held successful trials of what it called “FTTP on demand” allowing additional fibre to be run on demand to a home in a Fibre to the Cabinet (FTTC) enabled area, providing the customer with Fibre to the Premise (FTTP) broadband that could support increased use of bandwidth-hungry applications. Initially developed for small businesses, it could have a significant benefit for homes for applications such as BT Vision. Addressing residential customers’ needs in the short term, BT said it was doubling the speed of its standard fibre broadband this Spring giving ISPs the chance to offer speeds of up to 80 Mbps.