BT profits down, but broadband and mobility growth continues

UK fixed line incumbent BT Group has reported a 15% fall in profits for its fiscal year ended 31 March 2006, despite a 6% rise in revenues. After exceptional items, pre-tax profit fell to GBP2.04 billion (USD3.85 billion), down from GBP2.35 billion the previous year. Turnover reached GBP19.51 billion, compared with GBP18.43 billion the previous year, as strong demand for its so-called ‘new wave services’ helped to offset a decline in its traditional business.

New wave services are becoming increasingly responsible for BT’s revenue growth. Broadband sales grew 35% to GBP202 million in the fiscal fourth quarter, and the company reported 7.9 million DSL customers at the end of March, with consumer DSL users up by 227,000 from the end of 2005 to 2.584 million. Revenue at its mobility services business was up 18% to GBP39 million, with much of the growth coming from BT Fusion, a converged fixed-mobile service launched in June 2005 that automatically switches calls between broadband networks and mobile networks to offer the user the cheapest and best connection. BT said the service had attracted more than 30,000 subscribers since launch.

Meanwhile, BT has unveiled plans to build Wi-Fi networks in twelve of the UK's largest cities. It says its has secured deals with local authorities in Birmingham, Edinburgh, Leeds and Liverpool, and has already begun the roll-out of the new ‘Wireless Cities’ service in Cardiff and London’s Westminster. A further six UK cities will be signed up shortly, with services scheduled to be up and running in all twelve metropolitan areas by February 2007, a spokesman for the company told AFX News.