BT profits flat despite mobile and broadband boom

Giving with one hand, taking with the other

Despite a surge in profits at BT's new wave businesses, the telco could only manage flat results in its full year financials for 2004, announced today.

Unveiling its full year results for fiscal 2004, the telco revealed that revenue from its new wave businesses - mobility, broadband and ICT services - rose by 32 per cent in 2004, to £4.5bn. Revenue across the group, however, totalled some £18bn for the year, a rise of just one per cent.

BT's Global Services division made its inaugural profit, generating £7m during 2004. With the acquisition of Infonet and Albacom also completed during the year and adding £111m to the balance sheet in Q4, chief executive Ben Verwaayen described the year as "exciting".

He said: "The global networked IT services business is building strongly and with purpose... We expect it to continue to grow".

Despite some big name wins for the services division, it still remains the financial poor relative of the new wave family.

The ICT services division grew by 15 per cent in 2004, while the broadband division racked up year-on-year revenue growth of 77 per cent - BT now has five million broadband customers - and the mobility division increased its revenue respectively by 45 per cent.

New wave business now accounts for 24 per cent of BT's total revenue, compared to 18 per cent in 2003.

However, as BT's 'new wave' businesses grew, so its old school units continued their downward spiral, with traditional consumer revenue declining by 11 per cent year-on-year. According to the telco, the ongoing decline is due to the impact of users swapping dial-up for broadband and carrier pre-selection.

Revenue per consumer household dropped by £3 in the fourth quarter, while revenue from SMEs fell by eight per cent. Revenue from corporates, however, more than made up the difference: growing by 16 per cent in the new wave business areas.

Ovum analyst Mike Cansfield said the result was a mixed bag for the telco - despite significant improvements in some areas of the business, the results overall were unspectacular - with revenue growth in particular leaving a lot to be desired when measured against other incumbent telcos.