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BT Grabs 6.96 Million UK Retail Broadband Subscribers as 1.7m Take FTTC

Thursday, Oct 31st, 2013 (8:00 am) - Score 5,350

BT Group’s latest Q3-2013 (calendar) results reveal that the operators consumer and business ISP divisions have grown their fixed line broadband subscriber base by +156k in the quarter to total 6.961m (up from +95k added in Q2 and +136k in Q1), which includes 1.7m superfast BTInfinity (FTTC) customers (up by +195k in Q3 vs +197k added in Q2).

The key question on everybody’s lips is whether or not the £450m per year free BTSport promotion, which was designed to help the operator compete against similar TV offerings from BSkyB (Sky Broadband), has had the desired impact. In order to succeed BT thus needs to show strong subscriber growth, especially for their TV services but ideally also in broadband (note: pre-tax profits are lower due to this investment).

Clearly the group’s overall retail broadband subscribers have shown a strong improvement but fibre growth remains level. So how about the BT TV (IPTV) service? Thankfully the picture is much improved for TV with BT adding +70k customers in the quarter to total 903,000 (up from just +23k added in Q2 and +40k in Q1). Clearly the free BTSport offer has had an impact and it must now continue in order to make the gamble worthwhile.

It should be noted that the BTSport service itself already has over 2 million customers, although many of those will be coming from BT’s existing TV and broadband base that benefits from free access. Virgin Media’s top bundles also include the service at no extra cost but others (e.g. Sky, PlusNet and YouView retail) still have to pay a fee to view the content.

BT also noted that it had won 44 of the Government’s Broadband Delivery UK (BDUK) contracts, which is practically all of them, and that work to roll the service out has now begun in 13 of those.

Gavin Patterson, BT Group’s CEO, said:

These are good results, with growth in earnings per share and free cash flow. This has been our strongest ever quarter for fibre take-up with Openreach net connections up 70%. Our fibre network now passes more than 17 million premises. It is open to all and many other service providers have now got behind it.

BT Sport has made a confident start and is already delivering for viewers. More than two million of our customers are signed up to it and our wholesale contract with Virgin Media means it is available to around four million homes in total. It is also delivering for the business, helping us achieve a record 93% share4 of broadband net adds in the quarter, our lowest line losses for five years and 4% revenue growth in our BT Retail Consumer business.

BT Retail’s Business division again saw good growth in IT services while BT Global Services and BT Wholesale both generated strong order books. I feel privileged to be the new CEO of BT and am determined to build on the strong foundations that are already in place. These are exciting times for the company and we are determined to deliver our strategy with energy and discipline.”

Elsewhere BT said that its superfast “fibre broadband” (FTTC/P) network is now available to 17 million UK homes and businesses and overall net quarterly connections (note: includes FTTC/P lines sold through third-party ISPs like Sky Broadband and TalkTalk) to this service increased by 316,000 (up from +265k in Q2) to total 2 million. Apparently this boost is due to BT’s rival ISPs now “actively marketing and selling fibre“.

In addition BTWholesale is now home to a total of 8,962,000 broadband lines (up by +101k in Q3), which is an improvement from the +90k added during Q2 but still lower than the 117k for Q1 (note: this also includes broadband from BT-based ISPs like Zen Internet).

Similarly the report notes that there are now a total of 9,025,000 unbundled (LLU) lines in the market (e.g. Sky Broadband, TalkTalk etc.), which represents a slower growth of +67k (down from +99k in Q2 and +167k added in Q1). This might have been eroded slightly by BT’s consumer division or general fibre line uptake.

So what about the financial side? BT Group’s consumer revenue reached £4,491m in the quarter (up slightly from £4,449m in Q2) and their reported operating profits topped £499m (down sharply from £659m in Q2). It’s also worth remembering that the group has a net debt of £8,074m and their bottom line will also be hit by Ofcom’s regulatory charge controls on WLR, LLU, ISDN30 and Leased Lines (negative impact of around £170m – £220m on group revenue and EBITDA in this year and next).

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By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook and .
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