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Eurobites: Soccer Surge for BT's Fiscal Q4

Also in today's EMEA regional roundup: Deutsche Telekom profits hit by US push; Telekom Austria challenged in Q1; bring on the smartphone orchestra!

  • Soccer has given an assist to BT Group plc (NYSE: BT; London: BTA): The operator's fiscal fourth-quarter financials reveal that the introduction of its BT Sport offer -- three TV channels featuring premium sports content, notably soccer from England's premier league -- has helped drive its consumer revenues up by a record 9%. BT Sport is offered "free" to anyone signing up for BT broadband, and is now available in about 5 million British homes (though that includes wholesale deals through other service providers such as Virgin Media). Overall fourth-quarter pre-tax profits were up 17% to £960 million (US$1.62 billion) on revenues that actually fell 1% to £4.74 billion ($8.04 billion). Separately, BT has extended its enterprise services relationship with Telefónica UK Ltd. (O2) for another five years. The agreement will enable O2 to offer its business customers a full range of connectivity services -- including mobile, Ethernet, and fiber broadband -- for the first time. (See BT's Got Balls, Confirmed: BT's Got Euroballs, and O2, BT Strengthen Enterprise Services Relationship .)

  • Investments in its US operations were largely to blame for a 3.9% year-on-year fall in first-quarter EBITDA (earnings before interest, tax, depreciation and amortization) to €4.1 billion ($5.71 billion) at Deutsche Telekom AG (NYSE: DT), though those same US operations helped boost revenues by 8% to €14.9 billion ($20.7 billion). The operator recorded 2.4 million net customer additions in the US during the quarter. Back on its home turf, Deutsche Telekom did well with its fiber offerings, gaining 222,000 customers in the quarter to take its total FTTH customer base to 1.37 million, though it still managed to lose 7,000 broadband customers overall in the face of fierce competition. (See T-Mobile Sacrifices Costs for Customers.)

  • A combination of intense competition, regulatory intervention, and a "challenging" economic situation in Central and Eastern Europe did for Telekom Austria Group 's numbers in the first quarter, as group revenues slipped 7% year-on-year to €975.9 million ($1.36 billion) while net income plummeted 26.5% to €40.8 million ($56.9 million). In the results statement, CEO Hannes Ametsreiter promises that remedial measures taken will help steady the ship before the year is out. Ametsreiter is something of a legend amongst the Light Reading editorial team, having named Scorsese's Taxi Driver as his all time favorite movie when we chatted with him a few years ago. (See Broadband Mix for Telekom Austria.)

  • Telefónica SA (NYSE: TEF)'s €725 million ($1 billion) bid for a controlling stake in Spanish pay-TV operator Distribuidora de Television Digital -- which has the less cumbersome "Digital+" handle in Spain -- has been accepted by media group Prisa, reports Reuters. (See Eurobites: Telefónica to Buy Pay-TV Player.)

  • At last! A phone orchestra! Vodafone Group plc (NYSE: VOD) is supplying an app that, it says here, will "transform handsets into projectors of sound and light, creating a live, collaborative music experience" at an upcoming Berlin gig by Booka Shade, thus creating its first "orchestra of phones." (Booka Shade is a "leading electronic dance act," but you knew that.) Well, as far as Eurobites is concerned, holding up smartphones at rock gigs is an abomination, and is to be discouraged. Same goes for glow-sticks.

    Lovin' the phone orchestra.
    Lovin' the phone orchestra.

    — Paul Rainford, Assistant Editor, Europe, Light Reading

  • mendyk 5/8/2014 | 10:37:28 AM
    Re: Pound for pound Yes, this looks like another case of content over-valuation. The premium on live sporting events is likely to keep inflating, mainly because live events are now the only programming that is somewhat safe from time-shifting (read commercial-skipping) -- although that benefit doesn't really apply to soccer matches (though it's huge for American football, which can carry an hour or more of ads in-game). The question is how much money are video service providers willing to lose to prop up revenue numbers.
    PaulERainford 5/8/2014 | 9:57:06 AM
    Re: Pound for pound The short answer seems to be 'no', Dennis. That (year-on-year) quarterly revenue increase of 9% equates to £86 million, while the 4% revenue increase for the whole of the financial year to March 31 equates to £173 million. Both those figures are clearly a lot less than £250 million. But BT would probably argue that they've laid the foundations for potential profitable growth, offering waivering BT customers a reason to sign the dotted line.
    mendyk 5/8/2014 | 9:35:11 AM
    Pound for pound Paul -- So BT spent about 250 million pounds for EPL rights this season, used that as a freebie to sign up new broadband customers, and saw a 9% revenue increase -- does the revenue increase cover the cost of the rights package?
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