BT 3Q results exceed expectations

9 Feb 2006

The BT Group has reported a smaller-than-expected decline in third-quarter earnings. For the three months ended 31 December 2005 the UK’s largest fixed-line telecoms operator posted earnings before interest, tax, depreciation and amortisation (EBITDA) after staff leaving costs, of GBP1.38 billion compared to GBP1.4 billion in the same period of 2004. Revenues were boosted by a 42% rise in so called ‘new wave’ revenues (broadband internet and corporate networking services), areas BT increasingly relies on to counter a decline in its fixed-line business. BT’s traditional revenues continued their decline, falling 3% during the quarter, with traditional consumer revenue dropping 10%. BT said its share of the consumer market fell 1.2 percentage points from the last quarter to around 58%, while its share of the business market remained steady at 41%.

The results come at a time of rising worries about the prospects of the telecoms sector across Europe amid intensifying competition, falling prices and changing technology. The Business newspaper reported last weekend that BT was considering a GBP350 million bid for Pipex , one of two companies to own WiMAX spectrum in the UK, in order to gain a headstart in the wireless broadband market. ‘I don’t think you per se need an acquisition to get into that space,’ BT Chief Executive Ben Verwaayen told CNBC TV, adding that the former monopoly could also get WiMAX spectrum by bidding for it in an auction.

United Kingdom, BT Group (incl. Openreach)