BT battles to keep broadband share
BT's share of new broadband customers fell from
30 percent to 25 percent in the last quarter as
it battled to keep market share in the face of new
"free" broadband offers.
Carphone Warehouse and Sky launched "free"
broadband offerings during the quarter, attracting
thousands of new customers, but BT continues to
carve a significant share of the market.
Chief executive Ben Verwaayen claimed he was pleased
with the figures. "In the quarter when we saw
these so-called free services launched, our market
share of net new customers was 25 percent, which
is a pretty good result," he said.
That figure is lower than BT's share of the total
installed market, which is 32 percent -- meaning
that rivals are growing their market share faster.
Nevertheless, with the number of people buying broadband
from BT passing three million last month, it remains
the market leader.
Carphone now has 420,000 connections and Sky, which
has gone for a slow starting roll-out, 74,000. NTL,
which is rebranding as Virgin Media, saw its broadband
new connections halve in the quarter as it added
78,100 against BT's 156,500 -- putting its total
at 2.98 million.
Verwaayen admitted there is now far more churn
-- people switching between broadband suppliers
-- but said BT was seeing more customers opting
for its more expensive packages, with six out of
10 choosing a benefits such as added security, wireless
hubs and internet telephony.
He added that the number of orders placed in the
last quarter was among the highest-ever at more
than 350,000.
BT needs to keep growing its new-wave services
as its traditional voice-based revenues from both
homes and businesses is in long-term decline.
In BT retail, traditional revenues declined by
9 percent in the quarter while new-wave revenues
increased by 34 percent. The latter made up 21 percent
of the total compared with only 15 percent in the
same quarter last year.
Verwaayen hopes that new offers of content will
help to pull in new customers and retain old ones.
It today signed a deal with Buena Vista, the distribution
arm of Disney, to show movies ranging from Pirates
of the Caribbean: Dead Man's Chest to Memoirs of
a Geisha on its soon-to-be-launched video-on-demand
service BT Vision.
BT today also launched its own version of YouTube,
BT Podshow, which is a partnership with the US entrepreneurs
who own Podshow there. The BT version launches with
more than a million hours of homemade movies and
music equivalent to 11 1/2 years' of viewing.
For the second quarter to the end of September,
BT's revenues rose by 4 percent to 4.94 billion
with profits before tax and one-off costs up 12
percent at 665 million. That's just over 5000 a
minute.
The dividend for the half-year rises 19 percent
to 5.1p. BT will next month reveal the results of
its triennial pension funding valuation. At the
end of the quarter its deficit was 2 billion, down
600 million on a year earlier.
