Video services

BT Reports Q2 Ups & Downs

BT gave its investors an early Christmas present today with fiscal second-quarter results that showed a slight decline in year-on-year revenues, to £4.98 billion (US$8 billion), but a 13 percent hike in pre-tax profit to £496 million ($800 million) thanks to lower costs. (See BT Reports Q2.)

In addition, BT has cut its net debt by nearly 12 percent in the past year to £8.7 billion ($14 billion), announced a slightly improved half-year dividend, and raised its earnings outlook for the full year. The British incumbent operator's share price gained 3.8 percent to 165.5 pence on the London Stock Exchange Thursday morning.

Why this matters
BT has emerged from a rocky period, caused by problems at its Global Services division, to achieve financial stability, and is sounding confident again, especially about its broadband rollout plans. BT noted that its second-quarter capex, at £608 million ($982 million), was up 9 percent compared with a year ago as it pumps money into its next-generation broadband rollout. The operator is even bullish about the 21CN again. (See BBWF 2010: What's With BT's 21CN?)

The carrier still has some issues to deal with, though. Global Services is still losing money (the only one of its four divisions reporting an operating loss), though those losses are much lower than a year ago and order intake is strong. The division is even hiring about 300 new people in the Asia/Pacific region to support existing customers and react to new bid opportunities. (See BT Targets APAC Growth.)

And the operator's video-over-broadband services strategy looks to have hit a brick wall. Despite having 5.34 million retail broadband customers, its hybrid BT Vision service has just 520,000 users, an increase of only 84,000 during the past 12 months. BT is persevering, though, and plans to introduce 3D movies and the BBC's popular catch-up TV service iPlayer to its package in the coming months, and is already planning BT Vision 2.0, which will include greater personalization, social media tools, and real-time gaming. (See BT Signs 3D VoD Deal With NBC.)

For more
Check out these related stories for more on BT's broadband plans and other developments at the UK incumbent:

— Ray Le Maistre, International Managing Editor, Light Reading

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