BT lifts dividend as £2bn TV sport move pays off
DEMAND for fibre broadband and television, driven by BT’s aggressive £2bn investment in sports content, led the telecoms giant to beat expectations in its full-year results yesterday and hike its dividend by 15 per cent to 10.9p.
Chief executive Gavin Patterson promised BT would continue with its strategy of buying premium sports TV rights and offering this for free to grow its broadband customer base.
During the fourth quarter BT added 170,000 new broadband customers, compared with 70,000 added by rival Sky, with 249,000 homes opting for its more expensive fibre optic broadband taking BT’s total to 2.1m.
Patterson also said BT would soon “shake up” the mobile market in the same way that it has done with sport.
“Mobile is a great opportunity for BT, and our customers are looking forward to us coming in to shake up the market as they’ve seen what we’ve done in sport,” Patterson said, adding that BT is already testing small cells and wifi hotspots for its mobile broadband network that will launch at the end of the next financial year.
While group revenues were flat at £18.3bn for the year, BT’s shares jumped 2.87 per cent to 387.6p on news that revenue from its consumer unit – responsible for broadband and BT Sport – jumped four per cent to £4bn, its first rise in a decade.
Global services, the unit behind BT’s 2008 and 2009 profit warnings that handles the IT needs of large corporations worldwide, also helped boost BT’s results. Profits at the division were up 12 per cent with overall BT profits up six per cent to £2.8bn.