BT restructuring delivers soaring profits

BT’s profit soared by 71% last year due to a combination of determined broadband expansion and operational restructuring.

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BT’s Adam and Jane campaign

Job cuts and a drive which has seen the telecoms giant hit almost 5m homes via its fixed broadband effort Openreach contributed to the jump in pre-tax profits to £1.7bn.

Now BT says it intends to double that number and reach 10m homes by the end of 2012, after revealing it would spend the bulk of its marketing budget on broadband this year.

The pledge comes as rivals raise the marketing stakes, with Orange unveiling a campaign earlier this month under a ‘no tricks’ strapline in which it claims to be offering the only trustworthy deal.

Elsewhere Virgin Media launched a members club to increase awareness partly of its high speed broadband offering.

Another competitor emerged this week as it was announced Microsoft had bought online visual communications company Skype for £5.2bn.

BT recently aired the latest TV instalment of its interactive campaign featuring couple Adam and Jane. It showed the couple marrying after more than 480,000 Facebook fans voted for them to tie the knot.

BT claims it has attracted 64% of new Digital Subscriber Line (DSL) and Local Loop Unbundling (LLU) broadband customers – its highest share in eight years after it added 162,000 new customers, a rise of 2%, in the fourth quarter to 31 March.

Despite the increase, overall revenues for its consumer retail business were down 5% to £7,748m in the year to 31 March, compared to the previous year. The drop is attributed to the continued fall in consumer line customers and lower call volumes.

Meanwhile it reported steady progress at its TV offering BT vision, adding 30,000 customers in the fourth quarter and says it intends to continue to drive growth with the roll-out of the BBC iPlayer.

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