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BT's TV customer growth slows but broadband market share grows
[July 31, 2014]

BT's TV customer growth slows but broadband market share grows


(Guardian Web Via Acquire Media NewsEdge) BT has outperformed City forecasts thanks to strong demand for fibre broadband lines, but growth in its pay television business has slowed.

Group revenues in the June quarter were ahead of forecasts, but down 2% on last year to £4.4bn, with only the consumer division posting growth. Adjusted pre-tax profits were up 7% to £638m.

BT television added just 5,000 customers in the quarter, because some 35,000 inactive set top box owners were removed from the numbers.

Excluding inactive customers, the rate of net new subscribers has slowed to 40,000, the lowest rate for five quarters. The end of the football season is partly to blame, with viewers waiting until August to sign up for sport, but growth is well below the peak of 70,000 new signings in the quarter ending September last year, just after the launch of BT Sport.



This is well below the peak of 70,000 new signings in the quarter ending September last year, just after the launch of BT Sport. The sports channels have an estimated 5 million viewers, because BT gives its the channels away for free to broadband customers, and because Virgin Media homes can tune in at no cost if they already pay for Sky Sports.

The number of customers who pay BT for television is lower, and has just reached 1.007 million subscribers. This is a little behind TalkTalk, which relaunched its pay television offer in the summer of 2013 and now has 1.1 million customers.


However, revenues at BT's consumer division, which houses its pay TV service, grew 10% year on year, with high demand for the faster speeds offered by fibre broadband. BT added 104,000 broadband customers in the quarter, a 64% share of the overall broadband market growth in the quarter.

Paolo Pescatore, an analyst at CCS Insight said: "BT's latest results underline the phenomenal growth in broadband and especially demand for fibre and BT is the undisputed leader in the UK in this area. The company's net growth within the broadband business adds are more than twice those of BSkyB for the same quarter. We feel its TV numbers are disappointing and BT faces some challenges as the company continues the migration towards the new YouView platform." BT's fibre network passes more than 20m premises, and so far 3m homes and businesses have signed up for the faster internet service – giving a 15% take-up rate. A total of 2.3m are taking fibre from BT, while the balance have signed up via TalkTalk, Sky and other broadband providers which use its network.

In a note published before the results, Berenberg bank analyst Barry Zeitoune wrote: "BT is in a sweet spot. After years of underperformance, it is using fibre and BT Sport to gain share in a market that is increasing pricing – which largely looks sustainable." (c) 2014 Guardian Newspapers Limited.

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