BT doubles its money with broadband growth

The latest figures show that ADSL take-up is going well but BT, which provides most of these lines on a wholesale basis, may not be doing so well at selling its own product in the retail world

BT's broadband operations are generating nearly twice as much money as a year ago, thanks to extremely robust take-up of its wholesale ADSL services, but things may not be as rosy on its retail side.

Announcing its second-quarter financial results on Thursday, the telco revealed that broadband revenue for the three months to 30 September totalled £106m, a jump of £45m compared to the same period in 2002.

BT also confirmed that by mid-November it had signed up over 1.5 million wholesale ADSL users, as reported by ZDNet UK on Wednesday.

"The UK has become one of the fastest growing broadband nations, with our broadband connections trebling over the past year. Voice over IP is now commonplace in the corporate sector," said Ben Verwaayen, BT chief executive.

But BT's grip on the retail broadband market may be slipping.

Figures released on Thursday show that by 30 September BT had sold some 1,335,000 wholesale ADSL connections, and had 639,000 retail broadband customers. This gives it a retail market share of just under 50 percent, with other ISPs such as AOL and Freeserve winning the remaining 696,000 users.

BT offers two retail broadband products -- the "no-frills" BT Broadband, and BT Yahoo! (a rebranded BT Openworld), but has not revealed the breakdown of their respective market shares.

Last year, several senior BT figures including Pierre Danon, chief executive of BT Retail, made bullish predictions about the future success of BT Broadband. In June 2002, Angus Porter, then the managing director of BT Retail's consumer division, told ZDNet UK that he expected there would be at least 500,000 BT Broadband subscribers by the summer of 2003 -- a target that the telco went on to miss.

The decision not to give investors full information about respective user numbers for these two products may be an attempt to hide the fact that forecasts such as Porter's still have not been fulfilled.

BT Retail had not responded to requests for further information on its broadband user numbers at the time of publication.