Soccer Kickstarts BT's IPTV Growth

Adding Premier League soccer content has tripled BT Vision's customer base, but restructuring costs hit the carrier's Q2 profits

November 8, 2007

2 Min Read
Soccer Kickstarts BT's IPTV Growth

Coverage of English and Scottish soccer has helped to accelerate the uptake of BT Group plc (NYSE: BT; London: BTA)'s IPTV service, BT Vision, the carrier announced today as it reported its second-quarter results. (See BT Reports Q2.)

BT launched its hybrid TV service (regular TV channels are delivered over-the-air; on-demand content is delivered over broadband) at the end of last year, but by the end of June it had just 20,000 BT Vision customers. (See Blurred Vision.)

Since then, though, the carrier has launched BT Vision Sport, which for £12 (US$25.24) per month provides live and time-delayed soccer matches from the English and Scottish Premier Leagues, plus coverage of PGA golf. (See BT Pushes Soccer Service and BT Turns On 21CN, IPTV.)

That launch, and the start of the British soccer season in August, has boosted BT Vision subscriber numbers to 70,000, said CEO Ben Verwaayen during today's earnings conference call. He added that total orders for the service now total 100,000.

BT believes the recent launch of a self-install option, something that Swisscom AG (NYSE: SCM) also plans to introduce for its IPTV service, will help drive further demand. (See Swisscom Still Dogged by IPTV Issues.)

BT's IPTV additions are helping to maintain Europe's status as the leading region for IPTV growth and subscriptions. (See IPTV Growth Gets Euro Pop, More Euro IPTV Growth, and Yet More Euro IPTV Growth.)

The other major challenge for the BT Vision team is to introduce interactive services, something that Verwaayen touched on earlier this year. (See BT Talks Google, IPTV & Collaboration.)

Underpinning BT's IPTV strategy is its ongoing broadband subscriber growth. During its second quarter, BT added 178,000 DSL customers, taking its total to more than 4 million. The carrier's main broadband rival, cable operator Virgin Media Inc. (Nasdaq: VMED), has nearly 3.6 million high-speed access customers. (See BT Boasts 4M DSL Subs and Virgin Media Reports Q3.)

Despite the growth in IPTV and broadband numbers, BT's share price dipped by 10 pence, more than 3 percent, early this morning to 305 pence ($6.43) as second-quarter restructuring costs of £167 million ($351 million) contributed to a year-on-year 31 percent drop in pre-tax profits to £435 million ($914 million).

BT is expecting to record total restructuring costs of £450 million ($946 million) during the current fiscal year as it revamps its corporate structure. (See BT Revamps, Creates New Units and Upheaval at BT's 21CN?)

BT reported second-quarter revenues of £5.1 billion ($10.7 billion), up 3 percent compared with a year earlier. So-called "New Wave" services, comprising networked IT services for corporate customers and broadband access services, generated £1.9 billion ($4 billion) in revenues, 38 percent of the total.

— Ray Le Maistre, International News Editor, Light Reading

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