Earnings: BT Vision, Broadband Steady; First Ever Loss Brings Job Cuts

While the global services division of Ian Livingston’s BT (NYSE: BT) implodes, the telco’s UK retail operations are holding their own. In the first three months of the year, it took 42 percent of new UK broadband sign-ups (at 99,000, that’s double what Virgin got), taking its broadband base to 4.8 million, still Britain’s largest.

Also in retail, its Vision IPTV service is now up to 423,000 customers, up from 398,000 at the end of 2008 – hardly a speck on the windscreens of BSkyB (NYSE: BSY) and Virgin Media (NSDQ: VMED), but a darn sight more than the 100,000 IPTV customers Tiscali had at the end of last year. Vision’s VOD is now getting 30 video views a month from each subscribers.

But retail unit revenue was dragged down three percent to £2.10 billion on slowing use of land lines for calling, while revenue in the Openreach unit fell by two percent to £1.29 billion after unbundling fewer broadband lines than last year. Openreach says Ofcom’s March statement on next-gen broadband “has given us the confidence to continue with our £1.5 billion investment plans to provide super-fast broadband services to at least 40 percent of UK households by 2012” – it’s accelerating roll-out, doubling the availability it had planned to deliver by 2009/10.

Overall, though, BT’s quarter is overshadowed by “unacceptable” performance in the global services division – the unit, which wires up corporate firms, is writing down £1.3 billion in contract charges. That means BT ends the quarter with a £1.27 billion pre-tax loss, and an end-of-year loss of £134 – its first ever. The company said it will cut 15,000 jobs (10 percent of staff) – the same number it has already cut in the last year.