BT posts 6% revenue fall but adds 85,000 broadband customers
BT has announced its results for the first quarter to 30 June 2012, with revenue down 6% to £4.48 million.
The group added 85,000 retail broadband customers in the quarter, representing 50% of the broadband market net additions of 170,000.
BT has also confirmed that it will launch a new football-focused channel next calendar year, after it secured the broadcast rights to 38 live games and 18 first picks for the 2013/14 to 2015/16 Premier League football seasons. The telecoms company will also start offering a bundled YouView service in the autumn.
Group Results
The results show that underlying revenue excluding transit decreased by 3.2%, reflecting the tough conditions in Europe and the financial services sector, the impact of regulatory price reductions and lower revenue from calls and lines.
Transit revenue is down by £67 million (including mobile termination rate reductions of £60 million), a £56 million negative impact from foreign exchange movements, largely due to the weakening of the Euro, and a £13 million impact from disposals.
Underlying operating costs were down 8%. Total operating costs before depreciation and amortisation and specific items decreased by £317 million, or 9%, to £3.1 million.
Payments to telecommunications operators were down 16%, reflecting lower mobile termination rates and reduced transit and wholesale call volumes.
Adjusted profit before tax was £578 million, up 8%. Net debt was £9.1 million at 30 June 2012, an increase of £60 million compared with 31 March 2012.
Broadband
BT added 85,000 retail broadband customers in the quarter, representing 50% of the broadband market net additions of 170,000. The group added over 150,000 BT Retail fibre broadband customers and the customer base currently stands at more than 700,000.
BT Retail consumer revenue decreased by 2%, in line with the previous quarter, with lower calls and lines revenue partially offset by growth in broadband, driven by an increasing contribution from fibre. This growth contributed to an increase in consumer ARPU from £343 to £350.
BT Retail fibre broadband net additions more than doubled from the prior year with over 150,000 customers added, with its customer base currently standing at more than 700,000. BT Vision added 21,000 customers bringing the customer base to 728,000.
BT has confirmed that it will launch a new football-focused channel next calendar year to host its new sports content. The company secured the broadcast rights to 38 live games and 18 first picks, around half of those available, for the 2013/14 to 2015/16 Premier League football seasons.
In addition, BT will start offering a bundled YouView service in the autumn, which “it expects to appeal to customers looking for the next evolution of the Freeview service”.
In the quarter, BT rebranded its wi-fi services, BT Fon and BT Openzone, to BT Wi-fi. There are now 4.2 million BT Wi-fi hotspots, which carried more than 1.7 billion minutes in the quarter, up 80%.
Outlook
BT’s outlook for 2013 remains unchanged with an improving trend in underlying revenue excluding transit, growth in adjusted EBITDA and normalised free cash flow broadly level compared with last year.
Ian Livingston, chief executive, said: “We have delivered another quarter of profit growth and the 11th consecutive quarter of double-digit earnings per share growth, although our quarterly cash flow was impacted by the timing of working capital movements.
“There were good performances in BT Retail, BT Wholesale and Openreach while BT Global Services was impacted by the tough conditions in Europe and the financial services sector.
“Our financial performance allows us to keep investing for the future. Our engineers are rolling out fibre at pace bringing fibre broadband to over 2 million more homes and businesses in the quarter and it’s now available to over 11 million premises.
“Our investment plans are creating around 2,000 jobs in 2012 by recruiting engineers to support our fibre plans and opening four new UK call centres. We continue to make good progress with our investments in the faster growing economies.”