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BT lifted by broadband, football rights

May 7, 2015

BT has reported a 14 per cent rise in annual profits, claiming it is outpacing its rivals in winning new broadband customers. Pre-tax profit rose to £2.645 billion for the year to the end of March but revenues at the group dipped 2 per cent to £17.85 billion.

The telco said business was being driven by new broadband customers and the consumer division which is offering Premier League football coverage.

BT added 121,000 retail broadband customers in the first three months of the year. BT now claims it has outpaced rivals Sky, TalkTalk and Virgin for seven quarters in a row.

BT also said it connected a record 455,000 new fibre broadband customers in the first three months of the year, a 31 per cent increase on the same period last year.

Speaking on its BT Sport channel, the telco said: “We secured FA Premier League football broadcast rights for a further three years until the end of the 2018/19 season, including four more games per season and the prime Saturday evening slot.  We are paying 18% more per game, the equivalent of around 6 per cent inflation per year. We also signed an extension with Aviva Premiership Rugby to broadcast top-flight rugby until the end of the 2020/21 season. These rights enhance our existing schedule of football, rugby and other international sport, including the exclusive live footballing action from the UEFA Champions League and UEFA Europa League starting this summer. BT Sport average daily audience figures increased 15 per cent year on year from the start of the football season in August to the end of March.”

Analysing the results, Paolo Pescatore, Director, Multiplay and Media at CCS Insight, offered the following insights:

“BT Consumer continues to be the rising star within BT, with these latest results underline the phenomenal growth and demand for fibre across the UK. The company has also seen a strong and encouraging start to its mobile offering; more than 50k have signed up already. However, we expect to see a strong marketing push for its mobile service later in the year. This will be tied in with the new Premier League season, as consumers look to renew their broadband subscriptions to continue receiving BT Sport for free. And, of course, BT will try to up sell users to its Champions League offering.

BT sport is performing well, but it needs to do a better job of getting people to tune in to its programming. It is simply not sustainable for the company to continue giving BT Sport away for free. More so, as it competes with Sky and others for key sports rights and spends millions more in order to air the key Premier League games that people want to watch.

It is clear that the company has made some big long term bets and as a result has made itself relevant again. There is undoubtedly a good vibe at BT and lots of excitement. Now it needs to keep on delivering.

As the telecoms industry continues to evolve, BT is now very well placed to succeed given its existing assets such as fibre, sports rights, extensive Wi-Fi network and in mobile through the acquisition of EE. We believe that competition will intensify as Sky launches mobile next year and others including Vodafone launch their own multiplay offers.”

 

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