BT abandons television broadcasting hopes

British Telecom has abandoned hopes of offering mainstream television channels down its telephone wires, in favour of a drive to improve Internet services for home computers.

The decision, confirmed yesterday by Sir Peter Bonfield, BT's chief executive, came as the company revealed a 12 per cent rise in profits between October and December, to pounds 1.02bn.

Sir Peter gave the clearest signal yet that BT is no longer interested in using its network to offer entertainment programmes, despite the long- running campaign to end the Government's broadcasting ban. The Department of Trade and Industry looks set to announce the lifting of the ban in 2000, a year earlier under the previous government's policy.

"It is extremely unlikely we'll be squirting television channels down our wires," said Sir Peter, adding that the technology had moved on since BT had talked of investing pounds 15bn to bring fibre-optic cable to every home in the country. BT will shortly begin two home trials offering much faster Internet access through its existing copper local network.

Sir Peter said talks were continuing with several US operators, but he said there were "no discussions" underway with Cable & Wireless. He hinted that BT would ask shareholders for the power to make share buybacks at the annual meeting in July, but insisted no decisions had been taken.

The company's residential customer base grew by 10,000 lines in the last quarter, despite growing competition from cable companies. Losses from the company's expanding European operations were running at pounds 300m a year.