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BT announce higher profits on bumper quarter for broadband
Thursday 12 May 2011 10:47:21 by John Hunt

BT have published their fourth quarter results up to 31st March 2011 and are heralding this as a bumper quarter for broadband as the company has seen significant growth. 252,000 broadband customers were added in the last quarter through BT's Openreach and Wholesale companies with 64% of these (152k) being to BT Retail. This is Retail's best three quarters in terms of share of net additions for 8 years. Over the entire financial year, the company gained 1.1 million broadband connections.

Financially, the company posted higher than expected profits, up 71% to £1.7 billion on falling revenue which was down 4% on the year. Cost savings outstripped the planned £900m at £1.1bn partially through reduced labour costs and procurement savings.

"We have delivered profits and free cash flow ahead of expectations for the year, while making significant investment in the business for the future. Free cash flow has nearly trebled compared with two years ago.

We have consolidated our position as the leading provider of broadband in the UK with our highest quarterly share of DSL broadband net additions for eight years. BT Global Services order intake was up 10% at £7.3bn and it has turned cash flow positive a year ahead of plan. Openreach saw growth in its copper line base in the year, reversing historic trends. Our roll out of super-fast broadband is one of the most rapid in the world, passing an average of 80,000 additional premises each week and we have plans to roughly double the speed of our fibre-to-the-cabinet based service in 2012.

We expect to continue to grow our profits and free cash flow whilst investing to return BT to growth. These results show we are making progress, but we are well aware there remains a lot more to do."

Ian Livingstone, (Chief Executive) BT Group

The BT vision service saw 30,000 net additions in the quarter with a customer of 575,000, and the company are continuing to enhance it with faster HD downloads now available and BBC iPlayer being rolled out.

BT Infinity customers are now up to 144,000 with new orders running at an average of around 5,000 a week. This puts them around level pegging with Virgin who are expected to report similar figures for users on their 50meg service. BT's fibre-to-the-cabinet (FTTC) footprint stands at around 5m at present and they should push their total fibre coverage past 10m in 2012. The company also mention that they "expect to roughly double" download speeds on their FTTC service next year and mention that speeds can further be improved as "the technology is fully future proofed".

Of course, that will only hold true for some users. Those on long lines connected to fibre cabinets won't see a significant increase in speed beyond the current generation of broadband speeds, something that only a full fibre-to-the-premises solution (or fibre/coax hybrid cable broadband network such as Virgin Media's) can currently manage.

Comments

Posted by cyberdoyle over 6 years ago
they have no need to try to grab the government funding then. That can go to communities and businesses building true next generation access for the 3rd of the country bt and virgin won't venture in to.
Posted by mobilebb over 6 years ago
Seems they're also pushing FTTC speeds up to 80mb by using higher frequencies.

http://www.ispreview.co.uk/story/2011/05/12/bt-uk-tops-5-7-million-retail-broadband-customers-and-preps-80mbps-fttc-service.html
Posted by themanstan over 6 years ago
@CD

They need to be making a decent profit, they have £2.5 billion worth of debt notes maturing this year...
Posted by GMAN99 over 6 years ago
@cd, so... the new business model is to make money and then give it away?

If BT or Virgin won't venture into areas that can't make a profit, they still won't regardless of how much money they are making elsewhere? They don't make money and then invest into areas of no to very little return??

How some minds works eh....
Posted by krazykizza over 6 years ago
@CD you are so stupid. BT need all the funding they can lay their hands on. Without BDUK funding, they won't have a business case to go into rural areas. Without the money you'll have no chance of geting super fast BB.

You should really look into the TRUE purpose of the funding and the criteria that needs to be filled to qualify. You can't just give it away to someone with no solid plan and the man power to get people connected.
Posted by GMAN99 over 6 years ago
@themanstan and the pension
Posted by themanstan over 6 years ago
@Gman

Yep, >£500million a year for the next 3 years at which point BT and the trustees will review the situation.
Posted by themanstan over 6 years ago
Off topic, anyone heard any gossip on when phase 7b FTTC/FTTP is going to be announced?
Posted by AndrueC over 6 years ago
Maybe the reason some people can't afford a leased line for their rural business is because they don't understand business principals.

It's hard to be a success when you're idea of good practice is to give away everything you earn.
Posted by MCM999 over 6 years ago
@CD are you really as dense as your posts suggest or do you just play stupid when posting here? Why on earth should BT plough their money into a project where their costs are likely to far exceed any income that might be generated? BT has massive debts to fund and more importantly is answerable to its shareholders. I doubt those shareholders consider subsidising farmers as BT's responsibility.
Posted by themanstan over 6 years ago
I think it's been highlighted many times the lack of business acumen CD holds. And, that it's better to leave your money in the bank than invest in a business plan that doesn't return more money after all expenses and depreciation, than said bank.
Posted by Dixinormous over 6 years ago
BT Retail's gamble on selling Infinity with no markup over the normal services seems to be bearing fruit in a big way - well done them.
Posted by NilSatisOptimum over 6 years ago
BT will have to go rural areas, as margins are squeezed and markets become saturated with similar products. I see it now with my exchange once deemed to rural even for the likes of Sky and TT; they have fully unbundled within the last 6 months also Bt have interests in Satellite BB, and the saga of pricing for FTTH to brought by telegraph poles. The human story is their employee’s pensions and the people who lost their jobs for the shareholders. Far too many Intellectuals who intellectualize!
Posted by themanstan over 6 years ago
Nothing to do with shareholders, when you are making a loss and in a situation where you will not ba able to service your debts it's called bankruptcy. So you cut costs, which involves many things including restructuring and reducing workforce. If you don't you end up like NTL and Telewest.
Posted by GMAN99 over 6 years ago
If its not economically viable you don't go into an area, its as simple as that, if things change and it becomes viable in the future companies will invest of course, but you don't go in just for the sake of it, if there's no money to be made its pointless
Posted by jtthedevil over 6 years ago
Perhaps all those posting have forgotten the recent news items of FTTP by talktalk Virgin etc. for the final third. Why would they even consider this if there was no profit. Perhaps they don't have your foresight and you should tell them straight away.
Oh thats right, will you bleat about costs for FTTP when its so much easier and cheaper to do it in rural areas. Enjoy your FTTC and i'll wait for my FTTP.....
Posted by GMAN99 over 6 years ago
I hope you get it jt, but its just that.. news. How many news items have we seen for h2o and their fibre rollouts - EPIC FAIL

I can't wait to hear an update on the Fuji/Virgin/TT consortium, but if its based on PIA prices its probably a year before its agreed upon and then will probably take many years after that to get going if at all. Hope I'm wrong as there's no sign of FTTC where I live either
Posted by jtthedevil over 6 years ago
By the time they sort it out, it will have to be more affordable than LTE mobile broadband. If the coverage and pricing are good in the next year or two, landlines will be a thing of the past in rural areas, and will eat into urban.
How many people even use a landline now, other than for broadband, with people getting so many free minutes and texts from mobile providers?
Posted by GMAN99 over 6 years ago
Totally agree. I'm sure LTE will be with us before Fuji even start or not long after anyway. I probably use my home phone line for calls maybe... 3 or 4 times a month if that.
Posted by New_Londoner over 6 years ago
The claims being made for LTE sound remarkably similar to those being made for 3G before it was launched. I note the average speed actually delivered by 3G is a little over 1Mbps, and that there are still large swaythes of the country with no coverage at all a long time after launch.

Probably best to wait and see what actual performance is delivered in terms of speed etc before abandoning a (by then) 80Mbps FTTC line!
Posted by themanstan over 6 years ago
Indeed New_Londoner a good point, much lauded technologies need to be rolled out properly.
I have to use a femtocell off my broadband connection to give me full coverage in my home (not just the garden).

Shows how poor coverage really is:

http://licensing.ofcom.org.uk/binaries/spectrum/mobile-wireless-broadband/cellular/coverage_maps.pdf
Posted by chrysalis over 6 years ago
I am scratching my head on the ROI, where is it when BT charge the same for FTTC as adsl at the retai level? Also where is the funding for urban areas been ignored by BT?
Posted by GMAN99 over 6 years ago
@chrysalis it must be very long term ROI and also propped up by additional services / phone / Vision etc etc

They obviously want people on their product but if its 2 or 3 times the price of ADSL no-one will buy it, especially not during times like now where people have financial issues
Posted by themanstan over 6 years ago
Isn't this why BT have been suggesting that once this upgrade is complete there won't be a rush to upgrade FTTC to FTTP. The most likely upgrade post-FTTC rollout will be backhaul capacity. As peak speed becomes less important than sustained speed.
Posted by GMAN99 over 6 years ago
Yes, why would there be a rush. Some keep going on about why we must have ripping speeds and it must be fibre end to end, 80Mbps???

That must do 90% of households for years come on. I've asked many times what services other parts of the world enjoy with their 100Mbps and above broadband lines that we can't, still waiting on that one...
Posted by jtthedevil over 6 years ago
I'm not looking headline speeds from LTE, but any improvement from 3G would start to make it more viable for home internet. At the minute i'm on 0.5mb so the current 1mb averages for 3g are twice my speed, but the latency and reliability aren't there yet. If 4G can reduce the latency, give me 3-4mb reliably and 20GB a month at a reasonable price, my landline will be quickly disconnected. Hopefully we could see the first roll outs by O2 at the end of this year.
Posted by AndrueC over 6 years ago
@GMAN99:You and me both, waiting on that answer.

On the subject of mobile broadband:

http://cp.literature.agilent.com/litweb/pdf/5989-9793EN.pdf

Rather takes the marketing shine of 4G :-/
Posted by CaptainHulaHoop over 6 years ago
even 40 meg is enough for most average users.
I have FTTC and 40 meg sync, but i'm using a usb wi-fi dongle so only getting 25 meg thruput.
It won't be that difficult for me to run over an ethernet cable, but really don't have the need for it. I can download stuff, watch VOD and browse all at the same time well enough, I really don't have the need to mess about running cable.

Also, more and more average users have laptops running wireless G, until more have wireless N they won't see over about 22meg anyway, no matter what their sync speed is.
Posted by otester over 6 years ago
@AndrueC

It won't be until (4G) LTE Advanced that we see a large improvement.

3G LTE will improve power consumption and pings, I think the price/usage ratio will be negated by the take up of people living in slow speed areas.
Posted by chrysalis over 6 years ago
20mbit is enough, the problem tho is old 20mbit services supplied over adsl2+ in practice dont get close to 20mbit and are nearer 4mbit on average, so whilst the headline speeds of 40mbit and 80mbit sound crazy, the real benefit of higher average speeds is whats needed.
Posted by New_Londoner over 6 years ago
@chrysalis
I think you'll find a bit more than 20Mb download useful if you take into account the increasing use of IPTV in a home environment. The biggest advantage of FTTC though is the upload speed, which makes it far better suited for businesses, home workers etc.
Posted by cyberdoyle over 5 years ago
@krazykizza I have read all the tenders. have you?
Before you call someone stupid you should read them yourself.
The funding is supposed to be for rural areas. BT won't do them, they will do cabinets. And cabinets are no use to rurals. They are hardly likely to put a £30k cabinet on every rural home. @MCM999 you should read what I put before misinterpreting it. Only fibre can go the distance.
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