ISP BT Top 6.28M Broadband Customers as FTTC Passes 10M UK Homes

National UK telecoms giant BT has released its latest results to 31st March (Q1-2012), which saw their retail broadband ISP subscriber base add +136,000 customers (down from +146k in Q4-2011) to hit a total of 6,280,000. Elsewhere its FTTC superfast broadband service has now passed 10 million homes and businesses (almost 40% of the country), well ahead of their original Q4-2012 target.

The results represent another strong quarterly growth in broadband subscribers, albeit one that has continued to slow. BT Retail’s share of the superfast broadband (BTInfinity) base increased by +131,000 in Q1-2012 to reach over 550,000 customers, which marks a huge jump from the +95,000 added in Q4-2011 and reflects the growing coverage of their up to 40-80Mbps (Megabits per second) capable FTTC technology.

Meanwhile the BTVision (IPTV) service continued to grow by adding +28,000 new subscribers (total 707,000), which is down once again from +39,000 in Q4-2011 and +44,000 in Q3-2011. This is surprising as the growth in faster broadband connectivity and new content should be having a more positive effect.

Ian Livingston, BT’s Chief Executive, said:

“In what remains a challenging environment we have delivered another year of growth in profits and free cash flow. Our financial strength has allowed us to invest in the business, make a £2bn payment into the pension fund, reward employees and deliver double digit growth in shareholder returns.

We have now passed 10m homes and businesses with our fibre roll-out. This is many months ahead of schedule and brings the benefits of super-fast broadband to families and businesses in cities, towns and rural areas across the UK. We remain the leading provider of broadband in the UK and over half a million customers are already taking our fibre-based BTInfinity product. At a time when many of our corporate customers are facing their own challenges, our investments internationally will help those seeking to expand in faster growing economies and this is reflected in £2bn of new orders won by BT Global Services this quarter.

While we will be impacted by economic and regulatory headwinds, we expect to continue to grow profits over the next two years, with normalised free cash flow growing to above £2.4bn in 2014. We will continue to pursue our prudent financial strategy, investing in the long-term future of the business, supporting the pension scheme, paying down debt and enhancing shareholder returns.”

BT also took the opportunity to remind people that it “could” grow the current superfast broadband footprint from almost 40% of the UK today to 90% by 2017 (the current target for their official £2.5bn privately funded rollout is just 66% by 2014), albeit only with a significant (lions share) injection of cash from the governments Broadband Delivery UK (BDUK) office. BT inform ISPreview.co.uk that “we would be willing to invest further funds (of around a billion pounds) should we win the public funds on offer” (total £3.5bn).

The operator is also still on track to make its new FTTP-on-Demand service commercially available to all ISPs by Spring 2013, which would effectively make the true fibre optic (up to 330Mbps) speeds of FTTP technology available “wherever we have deployed fibre enabled cabinets” (aka – FTTC). But this service is likely to be more expensive and will be aimed primarily at business consumers.

As a side note, BT Wholesale’s share of broadband lines in the UK market currently stands at 8,543,000, which is actually down by -8,000 lines in the quarter (Q1-2012) and marks a big change from the +41,000 added during Q4-2011. BT suggests that this and a related decline in revenue is “primarily due to the ongoing migration of broadband lines to LLU” ISPs, such as Sky Broadband. Indeed when you exclude BT Retail the Wholesale division only has a total of 2,263,000 broadband lines, which is a quarterly decline of -144,000 in Q1-2012 (compare that with -105,000 in Q4-2011).

UPDATE 12:59pm

Added some more details about BT’s 90% superfast broadband target and a small quote from BT to reflect the addition of an extra £1bn in funding, if applicable.