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BT looks to fibre, Wi-fi and 4G for growth

BT is adding new copper and fibre broadband customers to its network as it continues to extend the reach of its fibre network, but tough conditions in Europe and declining call revenues are eating into its takings.
Written by Ben Woods, Contributor on

BT's full year financial results for its fiscal 2012 revealed that the company now has more than 1.5m customers on its fibre network, with more than half of that number taking up the service through the BT or a reseller in the last year.

The company reported a drop in full year revenues of around five percent to £18.253bn in comparison with its 2011 fiscal year, but a two percent rise in pre-tax profits.

Accounting for the drop was lower revenues from calls and lines, tough conditions in Europe and financial services sector and regulatory price reductions, BT said on Friday. Despite the drop in revenues, the proposed share dividend for the year was 9.5p, up 14 percent.

"We are doing what we said we would do. In an environment where it is easier to focus only on the short-term, we are investing in our future and delivering growth in profits and dividends," Ian Livingstone, chief executive of BT, said in a statement.

The fibre provider

Over the period BT has continued to roll out its primarily fibre-to-the-cabinet service, which is now available to more than 15m customers - around 6.2m of which were added during the last financial year. On Thursday, as an incentive to further drive adoption of its broadband services, BT announced that customers will be able to watch its new BT Sport channels at no extra cost.

As an incumbent, formerly publicly owned company, BT is required to provide access to its infrastructure to other communications providers (CPs), which make up around 200,000 of its 1.5m fibre customers. In Q4 2012, BT added 270,000 fibre customers, of which 211,000 bought the service directly through BT Retail. The company noted that some of these customers with copper broadband services that switched to fibre.

"We are driving fibre across the UK, launching high quality sports channels, investing in the high-growth regions of the world and will use our Wi-Fi capabilities and 4G spectrum to make sure our customers will be the best connected. We have created around 3,000 new jobs in the UK over the last year to support these investments," Livingstone said.

BT was a surprise bidder in the UK's 4G spectrum auction which were completed at the end of February and won lots in the 800MHz and 2.6GHz spectrum bands. It has since signed a ten-year deal with O2 to help underpin its own 4G nationwide network when it goes live later in the year.

BT also posted net gains in its non-fibre (copper) broadband service adding 834,000 customers in the year, around 424,000 of which bought it directly from BT Retail.

As the roll out of BT's fibre broadband service continues, the company expects it to be available to 19m premises by spring 2014. It is also the only company to win any of the contracts to provide broadband services in rural areas under the BDUK framework; BT said it expects to add more BDUK related deals "in the coming months".

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