BT has reported a 16% rise in pre-tax profit to £632m on revenue of £4.3bn for the first quarter. Core earnings are up 1% to £1.4bn for the three months to the end of June, which is in line with market expectations.
BT is currently in the midst of buying the UK’s biggest mobile operator EE and is expecting approval of the merger of the deal by March 2016
BT re-entered the consumer mobile market in March via an MVNO arrangement with EE prior to entering negotiations with the operator, this has allowed BT to operate within the mobile market while it waits for regulatory approval next year. Over 100,000 customers had signed up in the first three months.
Gavin Patterson, Chief Executive, commenting on the results, said “This is an exciting time at BT. We continue to invest heavily in our superfast fibre broadband network. It now reaches around 80% of all UK premises and we will work with government to help take fibre broadband to 95% of the country by the end of 2017. Our technical trials of ultrafast broadband using G.fast are progressing well; we’re on target to start large-scale customer trials this summer.
“We’re launching BT Sport Europe in the next few days, the new home of UEFA Champions League football, which is free for our BT TV customers. We are also leading the way on Ultra HD TV. Our BT Sport Ultra HD channel will be the first live sports channel in Europe offering picture quality four times that of normal high definition.
“We have also invested further in improving customer service and Openreach is running ahead of all 60 minimum service levels set by Ofcom for this year. And we are engaging with Ofcom as part of its Strategic Review of Digital Communications which offers scope for deregulation and the potential to create a more level playing field in pay-TV.
Paolo Pescatore, Director, Multiplay and Video at CCS Insight commented on the results “Overall, this is a modest set of results as BT Consumer continues to stand out with another good quarter of subscriber and revenue growth vs. other segments.
We are now moving into a couple of key quarters for the company as the new Premier League season kicks off, but more importantly sole ownership of the UEFA Champions League rights. In the last week, BT has stepped up marketing quite considerably for BT Sport Europe, as there is a clear opportunity to target disgruntled Sky Sport subscribers.
All eyes are now firmly on the launch of the first Ultra HD (4K) live sports channel in Europe, BT Sport Ultra HD, this coming Sunday between Arsenal and Chelsea. This represents a significant milestone for the company and a first given that BBC and Sky traditionally have been the first to bring new innovation to the TV market.
The results also reflect an encouraging start to BT’s return to the consumer mobile market. Having added more than 100,000 users within three months it shows that there is a strong appetite among its customers to sign up to more services. This further validates its cross selling strategy, its move back into mobile and with its acquisition of EE, BT will have an extensive retail footprint to showcase a wider range of services.”