BT announce higher profits on bumper quarter for broadband
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.