BT Vision Sign-Ups Halved As Profits Fall 45 Percent


BT (NYSE: BT) Vision added 18,000 customers in the three months to September 30, a fall of almost 50 percent on the previous quarter blamed on a summer holiday lull. But after a “data cleanse” of its customer base during BT’s Q2, the service has just 436,000 users — only 3,000 more than in Q1 — showing just how far away BT is from achieving its now abandoned target of three million Vision customers.

Overall, in the six months to September 30, BT’s revenue was stable at £10.3 billion but profits fell 45 percent year on year to £547 million, due to higher leaver costs, pensions charges and one-off charges. Net cost savings for the year will be more than £1 billion.

VOD stats: There’s still some IPTV fighting talk from Gavin Patterson, CEO of BT Retail, who told the investors’ call: “We want to count Vision customers in millions, not hundreds of thousands“. Quarterly Vision views are up 14 percent period on period to 34 million — a threefold increase year on year and “more than most terrestrial TV channels”, as BT CEO Ian Livingstone points out. A HD Vision box is due for launch next year.

Broadband additions: BT added 72,000 broadband customers in the quarter, taking its total to 4.9 million. That’s down slightly on Q1 but represents 43 percent of new additions in the market. In the retail division overall, the company made six percent less revenue year on year at £2.06 billion, due to lower fixed line and call revenue — but average revenue per customer is up £6 on Q1 to £296 as customers buy more services.

Project Canvas: It’s clear BT is pleased as punch to be the only IPTV hardware provider in the BBC-convened web TV consortium. Patterson told investors that being part of the group will “provide a quality of service guarantee”, marking the partners out from business that “just go over the top” with consumer IPTV products of their own. Ofcom is currently investigating whether BT and others should have cheaper wholesale access to BSkyB’s coveted sports and movies channels and Patterson said unequivocally that “if it’s available” BT will retail Sky’s content, possibly over DTT as well as IPTV. BT has argued that Project Canvas needs access to Sky’s premium channels to succeed.

Next-gen networks: BT has begun rolling about a 20Mbps service to regular customers using ADSL2+ connections while some users are getting speed of up to 40Mbps as part of a fibre-to-the-cabinet trial. BT says it’s chosen two sites for a trial of fibre-to-the-home broadband trial which will allow speeds of up to 100Mbps — the company plans to make fibre services available to 40 percent of Britsh homes by 2012, at a total cost of £1.5 billion.

Q1 earnings: In the three months to September 30, made three percent higher revenue at £5.12 billion — a six percent decline without favourable foreign exchange movements and £112 worth of acquisitions. After leaver costs of £21 million, pension interest payments and investment in next-gen broadband networks, pre-tax profits were down 44 percent year on year to £275 million.

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