BT Forecast to Reveal Revenues Fall

Telecoms giant BT is expected to reveal a dip in revenues in the third quarter on Friday as the fight for broadband customers in the UK hots up.

The FTSE 100 group, which had six million retail broadband customers at the end of September, is forecast by City analysts to reveal a 4% decline in revenues as its retail division revenues, which cover broadband and landline phones, drop 5%.

However, the company, which operates in 170 countries worldwide, is also forecast to report a 16% increase in pre-tax profits to £591 million as it keeps a tight lid on costs.

The results come as BT and its competitors fight to pull in customers with more “super-fast” connections, with BT already announcing that its service will double its speed up to 80Mb in the coming months while Virgin Media announced four million of its broadband subscribers will be able to use the internet at double their current speed.

City analysts have warned competition is set to get even tougher for BT as BSkyB launches its faster fibre-optic broadband service and TV service YouView challenges BT Vision, the on-demand and pay-per-view service.

Nick Lyall, analyst at UBS, said: “Operations are expected to remain solid but Sky fibre and YouView introduce greater uncertainty this year.”

Shares in BT are 17% higher than a year ago and have climbed 32% from a low point in August after it reported an improved performance in the second quarter of the financial year.

BT said group-adjusted pre-tax profits increased by 15% to £570 million in the three months to September 30 as it added 166,000 new gross retail broadband customers, a 46% jump on a year ago.

Satellite broadcaster BSkyB is expected to report resilient profits growth on Tuesday despite pressure on the rate at which it signs up new customers.

At the end of 2010, the company smashed through the 10 million customer barrier for the first time, putting it in 36% of homes in the UK and Ireland, but more recently subscriptions have slowed as consumers cut back on luxuries.

Source: Shropshire Star, 29th January 2012

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