7th Nov 11
BT beats Sky in net users and TV viewers
by Adam Richards
Glued: BT surpasses all competitors with internet and TV packages
Glued: BT surpasses all competitors with internet and TV packages
BT outpaced its main competitors in terms of broadband internet users as it gained 166,000 new customers during the third quarter, helping it beat profit expectations.
BT Vision, the group’s television service, also performed strongly, outpacing Sky for the very first time. The telecoms company boosted its broadband user numbers by 46 per cent, in comparison with the same period last year, during the three months ending 30 September. It now boasts six million broadband customers. Sky added 150,000 subscribers over the same period, but just 19,100 signed up with Virgin.
BT managed to surpass analysts’ expectations with its pre-tax profits for the third quarter climbing by 15 per cent year-on-year to £570m, as underlying revenues increased by 0.4 per cent to £4.8bn. The firm’s shares closed 2.8 per cent up at 192.7p upon the news while Ian Livingston, the chief executive, described it as “another quarter of progress”.
Mr Livingston, who has steered BT through a tough two-year period, remained cautious, saying that the numbers were reasonable and that they were happy with growth in earnings being in the double digits.
BT Vision grew at a quicker pace than Sky TV, but from a considerably lower customer base. The firm, which has been operating for four years, achieved 41,000 new additions – a two-year high. Sky TV added 26,000 new customers during the same period.
BT also claimed to outpace Virgin Media, but with new customers being added to its TiVo service, the latter disputes the claim. A BT Vision spokesman acknowledged that it was expanding from a considerably smaller base than its competitors, of 638,000. Virgin boasts over 3.7 million users, while Sky has over 10 million.
There was also good news for BT’s retail division, which saw its earnings before taxation, interest, amortisation and depreciation rise from £414m in the second quarter of last year to £445m the following year. In spite of the group achieving a strong three months, BT chose not to increase its full-year expectations.
Mr Livingston said that the expectations are strengthened but not altered. He explained that there are some headwinds, especially in the medium and small-sized enterprises market, where the company is not spending as much on IT and the effects are being seen.
The firm also revealed that it was intending to move into the music streaming market in 2012. The chief executive confirmed that they are in discussions with the industry. It comes on the back of a similar partnership between Spotify and Virgin, and the relatively unsuccessful Sky Songs, which was scrapped last year due to a lack of demand.
Meanwhile, BT’s global services division, the main cause of £1.3bn full-year losses in May 2009, continued to perform better. Its profits and revenues grew, and it is looking towards Latin America to achieve further growth.
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