BT Sees 5% Revenue Rise In Q3
Communications giant BT has seen its revenue rise 5% to £5,126 million, with continued strong growth in new wave revenue more than offsetting the decline in traditional revenue, according to the company’s Q3 results.
The strong growth in new wave revenue continued and at £1,880 million was 17% higher than last year. New wave revenue accounted for 37% of the group’s revenue compared to 33% in the third quarter of last year. New wave revenue is mainly generated from networked IT services and broadband. Networked IT services revenue grew by 8% to £1,117 million, and broadband revenue increased by 39% to £520 million.
BT Global Services contract wins were £2.5 billion in the third quarter, with £8.2 billion achieved over the past 12 months.
BT had 10 million wholesale broadband connections (DSL and LLU) at December 31 2006, including 1.3 million local loop unbundled lines, an increase of 2.7 million connections year on year and 697,000 connections in the quarter. Over 50% of all UK homes now subscribe to broadband services, comprising both DSL and cable services. BT Retail’s share of the net additions in the quarter was 34%.
Revenue from the group’s traditional businesses declined by 1%, an improvement on recent trends. This strong performance reflects a robust defence of the traditional business and is despite the regulatory intervention, competition and migration of customers to new wave services.
Major corporate (UK and international) revenue showed growth of 6%, with 8% growth in new wave revenue and 3% growth in traditional services. Migration from traditional voice only services to networked IT services continued with new wave revenue representing 61% of all major corporate revenue.
Revenue from smaller and medium sized UK businesses grew by 3%year on year. New wave revenue grew by 31% driven by continued growth in broadband and other new wave services.
“This is another strong set of results; our strategy is delivering and the positive trends are gathering momentum,” said Ben Verwaayen, chief executive of BT. “The revenue growth of 5% reflects continued strong growth in new wave services and a robust defence of our traditional business, underpinned by growth in active consumer customers for the first time in four years.
“There are now more than 10 million wholesale broadband connections and the market continues to grow strongly. In an intensely competitive market BT Retail’s share of the net additions in the quarter was 34%. Openreach has reached 1.5 million LLU connections this month. The sales orders won by BT Global Services in the quarter were £2.5 billion.”
He continued: “After 19 consecutive quarters of earnings per share growth, our expectations are to continue to grow our revenue, EBITDA, earnings per share and dividends for this financial year and next.”