BT reports strong Q1 profts

BT Group, the telecoms company, recorded a 21% increase in pre-tax profits to £499m, in the first quarter, helped by “new wave” broadband and mobile services, which increased by 48% to £1.38bn. Revenue increased by 5%, buoyed by recent acquisitions Infonet and Radianz and the buyout of Albacom, an Italian firm.

The company secured global orders for IT services to the value of £2.4bn, in the three months to 30 June, including a major contract with the UK Ministry of Defence. Over the last 12 months, it also gained IT services to the total value of over £8bn.

The company hopes to increase profit margins in “new wave” services to offset fierce competition in traditional fixed-line services. Revenues from its traditional businesses fell by 6% during the first-quarter, due to increased competition, price cuts and changes to encourage customers to take up new wave services.

In June, the company agreed to give rival telecoms operators equal access to its UK fixed-line network. The move was necessary to avert the risk that Ofcom, the industry regulator, might order the company to be broken up. Rivals had complained that BT Group’s network-owning wholesale division was giving preferential treatment to BT’s retail arm.