BT savings plan offsets blows from recession

A COST-CUTTING drive boosted BT’s profits in its second quarter, despite regulation and the economic downturn hitting sales.

The telecoms giant put the fall in turnover down to “regulation, recession and rain” after a wet summer meant more engineers repairing infrastructure instead of rolling out new services. It also booked an £85m payment due to a Court of Appeal ruling on “ladder pricing” on call termination charges.

BT reported a seven per cent rise in pre-tax profits to £608m despite revenue falling nine per cent to £4.47bn. The troubled Global Services arm – which sells services to multinationals and governments – continues to make a loss. The department is doubling down on cost savings under its new boss Luis Alvarez.

“We have taken some hits,” chief executive Ian Livingston said, adding that “there is a lot to be done in Global Services”. The company also announced that its rollout of superfast fibre broadband networks was ahead of schedule. BT’s fibre network now reaches 12m homes, and the company estimates it will be available in two-thirds of the UK’s buildings in Spring 2014 – 18 months ahead of the original target.

BT is aggressively expanding in pay-TV, taking on Sky with a sports channel after it shelled out £738m for the rights to show live Premier League football matches. “We are convinced that TV is going to be an important part of our business,” Livingston said.