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Last Updated: Thursday, 29 July, 2004, 10:05 GMT 11:05 UK
BT helped by broadband demand
Fibre optic cables
"New wave" technology is helping BT transform itself
Telecoms giant BT has reported a drop in profits but seen a big rise in demand for its high-speed broadband internet service.

Pre-tax profits for the April to June period were 416m ($761m) down from 497m in the same period last year.

A decline in demand for fixed-line services was behind the profit dip.

But BT saw demand for its high-speed technology services rise by 32% and this part of its business now accounts for 20% of revenues.

Quarterly revenues for broadband internet services doubled to 186m, with 2.7 million customers taking up BT's packages.

Rivals bite

Regulatory intervention, competition and price cuts have eaten into its traditional fixed-line business, BT said.

BT, which once had a dominant 70% share of the fixed-line market, now faces stiff competition from rivals such as Carphone Warehouse, OneTel and Sweden's Tele2.

These companies have snatched a chunk of the market from BT though enticing promotions offering free local calls or cheaper international rates.

Meanwhile, regulator Ofcom is breathing down BT's neck as it considers a break-up of the company as part of a strategic review of the telecoms industry.

Coming 'Together'

The next quarter's figures will show whether BT's strategy of adopting a simpler pricing structure have paid off.

Its 'Together' packages were designed to fend off rivals, and, so far, a total of 119,000 customers signed up for BT Together in the last quarter.

The group is hoping for further customer interest after cutting line rental and call charges on 1 July.

Fewer customers defected during its first quarter compared with the preceding three-month period, BT reported.

The former monopoly lost around 100,000 customers in the April-June quarter, compared with more than 200,000 defections in the previous quarter, said chief executive Ben Verwaayen.

Meanwhile, net debt, which once was as high as 30bn, fell by 7% during the three months to 8.32bn.


SEE ALSO:
BT cuts cost of telephone calls
01 Jul 04  |  Business
BT to charge for 1471 call return
23 Jun 04  |  Business
Internet helps lift BT earnings
20 May 04  |  Business


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