Even though BT's (NYSE: BT) revenue dropped 2.8 percent year-on-year in Q3 to GPB 4.97 billion ($ 8.03 billion), the service provider's dedication to cost cutting and broadband growth drove up operating profits 2.6 percent to GBP 1.45 billion ($2.34 billion). This beat analyst expectations of GBP 1.42 billion ($2.29 billion).
Of course, the culprit contributing to its Q2 loss was a 6 percent drop in consumer revenue due to ongoing voice line losses to competitive carriers. At the same time, business and enterprise service revenue remained flat, an improvement over the 4 percent decline it saw in Q2. However, BT Conferencing revenue was up 7 percent.
Although traditional voice line service revenues declined, broadband adoption was up in Q3. During the quarter, BT reported that it added 114,000 new subscribers, a figure it says represents a 45 percent market share of the UK's DSL and local loop unbundled (ULL) connections.
A growing piece of BT's broadband pie is its higher speed broadband offerings. In Q3, BT reported that it had migrated about 1.6 million of its 5.34 million retail broadband subscribers to its up to 20 Mbps DSL service or its new Fibre to the Cabinet (FTTC)-based Infinity offering. BT said that it was signing up more than 4,000 new Infinity subscribers a week, which helped it reach its 38,000 fiber broadband subscriber mark at the end of September.
In addition to fiber-based broadband, IPTV adoption was also up in Q3. As of the end of September, the service provider had 505,000 IPTV subscribers.
Feeling encouraged by its Q3 performance, BT raised its full-year core earnings forecast from GBP 5.6 billion ($9.03 billion) to GBP 5.8 billion ($9.36 billion).
"We have made significant progress in improving profitability and cash flow, enabling us to invest in building the foundations for revenue growth in 2012/13," Ian Livingston, BT's President and CEO, said.
- see the earnings release
- TeleGeography has this article
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