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Broadband and managed services drive BT growth in Q3
By Laura Rohde

BT Group PLC (BT) reported moderate gains in its third quarter due to continued growth in its "new wave" technology segments, including broadband, mobility and managed services, it said Thursday.

The London company reported net income for its third fiscal quarter, before taxation, goodwill amortization and exceptional items, of £545 million (US$1.05 billion as of Dec. 31, the last day of the period reported), up 4 percent from £525 million a year earlier. Earnings per share rose 9 percent year-on-year to £0.048 from £0.044, BT said.

Third quarter revenue was £4.584 billion, up slightly from £4.578 billion in the same quarter in 2003. Underlying revenue was up by 3 percent, excluding the impact of regulatory reductions to mobile termination rates, BT said.

Ben Verwaayen, BT's chief executive, credited the quarterly gains to a record 800,000 broadband connections in the period, as well as strong growth at the group's global services division, where revenue for the quarter rose 10 percent to £1.5 billion, from £1.4 billion a year earlier.

Contracts with the U.S. pharmaceutical company Bristol Myers-Squibb Co. and French electronic systems and industrial electronics maker Thales Group SA showed that BT's services division is gaining a foothold in the competitive overseas markets, the company said. Turnover in its global products division grew by 3 percent, boosted by demand for MPLS (Multi Protocol Label Switching) products, BT said.

Additionally, the consulting and systems integration portion of its services segment saw robust growth of 27 percent, driven in large part by BT's IT infrastructure contracts with the U.K. National Health Service (NHS), it said.

Overall growth in broadband, mobility and managed services was 35 percent in the quarter, offsetting the company's continued declines in its traditional retail business areas, including its fixed-voice offerings, which fell 8 percent.

BT also continued to chip away at its net debt which stood at £8 billion at the end of December 2004, 10 percent below the level it was on Dec. 31, 2003.

BT, the U.K.'s largest telephone company, said its transformation strategy, designed to drive customers from traditional services to the new wave services like broadband and IP VPNs (Internet Protocol Virtual Private Networks), has delivered underlying revenue growth for four consecutive quarters.

Posted February 10, 2005 04:27 PM |