BT profits up as pension deficit dives

 
Steve Dinneen
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BT saw its full-year profits surge as bumper broadband additions helped push pre-tax profits up an eye-watering 71 per cent yesterday.

Revenues fell four per cent to £20.1bn as chief executive Ian Livingston continues to spin the wheel of the telecoms super-tanker, with sales growth expected in 2013.

Adjusted pre tax profits for the year rose 20 per cent to £2bn, buoyed by savings of £1.1bn.

The firm received a pensions boost, with its deficit falling to £1.4bn thanks to a £1.7bn appreciation of its assets and a steep drop in liabilities.

Pension trustees, who value the fund using a different metric, calculated the deficit at £3.2bn in December, while a separate BT “median” estimate for the pot is now £3.2bn in surplus.

BT stormed ahead of Sky in terms of broadband additions in the last quarter, adding 252,000 customers, including 91,000 from other firms piggy-backing on its network.

Its retail division, which accounts for around 25 per cent of the business, saw full-year revenues fall five per cent year-on-year, while operating profit remained broadly flat at £1.3bn. It added 30,000 new customers to its BT Vision TV service, taking its total to almost 600,000.

Its rejuvenated global services division reported a 10 per cent increase in orders. Its revenues declined five per cent over the year to £8bn, with an operating loss of £141m, in line with forecasts.

Livingston questions Fujitsu plans

BT chief executive Ian Livingston said he would welcome another player to “shoulder the burden” of broadband rollout to rural areas but encouraged investors to “go away and do the sums” to see whether Fujitsu’s ambitious plans will work.

Fujitsu says it will bid for government funds to help subsidise a £2bn project to provide superfast broadband to 5m rural homes. It also says BT must cut the wholesale prices it charges to access its infrastructure.

Livingston admitted Ofcom will probably be forced to intervene, with BT and its rivals unlikely to agree a price for use of its duct and pole infrastructure. He said: “We have been very open on pricing, based on regulatory principles... I’m sure Ofcom will look at the issue on a factual basis. Our prices are based on costs.”

He also revealed he learned about the plans from the press, with Fujitsu releasing a statement before contacting BT, despite the plans relying on its infrastructure.