BT's financial results are out today for year ending 31st March 2010 and with this comes a bit more detail on the expansion of the BT fibre-to-the-cabinet (FTTC) based broadband expansion we reported on Monday. An extra £1 bn is expected to be spent to increase coverage of fibre services to two-thirds of UK homes by 2015. This will give many more people access to faster broadband with speeds of up to 40 Mbps available to customers using FTTC technology. BT Vision is also to get a share of £200 million investment which will help improve the current product offerings. BT expect to be able to sell Sky Sports packages in time for the next Premiership football season following Ofcom's decision to regulate prices of these channels.
On the financials side, group revenue was down 3% to £5,356m in Q4, a slight improvement on Q3 (3%). BT Retail, the arm of BT that sells direct to end users saw revenue decline 4%, mainly due to a continued reduction in calls and phone line revenue. Average revenue per user increased to £309 (annual), an £8 increase from last quarter, largely driven by customers taking multiple products. They saw broadband users increase by 123,000 to 5.131 million, representing a 44% share of the UK market. BT Vision's, the TV over broadband service, customer base grew by 16,000 in the quarter (a slight increase in customer growth rate from 15,000 the previous quarter) to total 467,000. BT Infinity also launched in this final quarter of the year which gives users access to the 40Mbps fibre-to-the-cabinet services where available. No figures have been released on customer uptake of this, but it is likely to be low with current coverage of the service still low.
BT Wholesale also saw a decline in revenue which was due to a decline in low margin transit revenue primarily caused by mobile termination rate reductions. At the end of the quarter BT's Wholesale Broadband Connect (WBC) products, those that offer ADSL2+ broadband speeds (up-to 24Mbps) over BT's 21st Century Network (21CN), were available to 14 million premises, 55% of the market. 1.1 million end users were connected to the network.
"We have made good progress this year and have now set clear objectives for the next three years.
We have improved customer service, are transforming the cost base and have more than doubled free cash flow, but there is still a lot more to do.
We are investing in the future of our business, enhancing our TV offering and building on opportunities in our Global Services business. Assuming an acceptable environment for investment, we see the potential to roll out fibre to around two-thirds of the UK by 2015. This will take our total fibre investment to £2.5bn which will be managed within our current levels of capital expenditure.
During the next three year period we expect to improve our underlying revenue trends, and grow EBITDA and free cash flow, while investing in the business, supporting the pension fund, reducing net debt and paying progressive dividends.
We are on track with our goal of creating a better business with a better future."Ian Livingstone, (Chief Executive) BT