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The BBC's Liz George: "BT's self confessed aim is to be the world's leading telecommunications company"
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Thursday, 11 November, 1999, 18:59 GMT
BT profits from overseas expansion
BT hopes to become an international player

BT, the UK's leading telecoms operator, has increased its profits in the second quarter of its financial year to 890m, 3.9% higher than in the same period last year.

The company is now earning 100 each second.

That was ahead of analysts' expectations. Sales were also higher than expected -- up to 5.3bn, compared with 4.4bn last time.

The sales growth was driven by the expansion of its mobile phone group BT Cellnet, which added 1.4m customers, and internet and multi-media traffic which doubled in six months.

The underlying profits comparision excludes the 1.1bn gain from the sale of BT's stake in MCI this time last year.

International role

BT has invested 3bn in international ventures in the half-year, buying a stake in telephone companies in Japan and spending 135m in rolling out its mobile phone service in Germany.

It has also announced plans to expand its presence in Europe, moving into Austria for the first time and expanding its position in Switzerland.

The deal, with Germany's Viag Interkom, gives the joint venture with BT a 20% stake in Connect Austria and a 42.5% stake in Orange Switzerland.

BT's Chairman Iain Vallance said the global communications industry was going through a period of unprecedented structural and technological change and said earnings growth had been achieved despite mobile costs and the costs of developing new businesses.

But he warned that competition was rising.

"Growth prospects in the UK and internationally remain good but we face increasing competition as the globalisation of our industry continues," he said.

Internet phone charges.

In the UK, BT has come under pressure from other internet service providers for not allowing unlimited free local phone calls.

Earlier, it announced plans to reduce the amount it charged other internet service providers for internet access.

BT's chief executive defended his plans to continue to charge for internet usage on a metered basis.

Sir Peter Bonfield said that overall UK telephone charges were among the lowest in the industrialised world, and as low as in the US.

But he pointed out that far fewer people were connected to the internet in the UK and he was reluctant to have other customers subsidise internet usage.

He said that BT was investing 5bn over the next few years in new capacity to ensure access to new broadband internet services would be available throughout the UK.

BT shares rose 28p to 11.75 in early trading on the London stock market
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See also:
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BT's 'flawed' internet deal
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