BT buoyed by broadband as Global Services recovers

Profits at BT soared by almost a third in the final three months of last year as new customers flocked to sign up to its broadband package. The company also revealed that the worst of the problems at its Global Services arm were over, with the troubled division expected to make money again a year earlier than forecast.

BT yesterday reported a 30 per cent rise in pre-tax profits to £531m in the three months to the end of December, on a 3 per cent fall in revenues to £5bn.

Ian Livingston, the chief executive of BT, said: "These results show that we are making progress on a number of fronts. There is always more to do but our performance underpins our outlook for this year."

Analysts were pleased with the strong performance in BT's Retail division. The group signed up a net 188,000 new broadband customers over the quarter, the highest share of new additions for eight years. BT Vision, the pay TV business, saw its take up more than double to 40,000 although it still lags rivals BSkyB and Virgin Media. Losses in the voice line business fell.

There was also good news at Global Services. The company revealed in 2009 that the division had dragged it into a full-year loss, swinging from a £1.9bn profit the year before. BT slashed jobs and froze pay following the news, and Mr Livingston apologised to shareholders.

Yesterday, the company said order intake was up 8 per cent, including new contracts with Gala Coral and ArcelorMittal. BT added that the division would generate £100m in operational cash flow for the full year, 12 months earlier than previously forecast.

BT also announced that its debt had shrunk by £1.4bn to £8.7bn and the pension deficit had been further reduced. It now stands at £2.7bn net of tax, from £6.4bn a year earlier.

Vodafone looks smart as revenues grow

Vodafone shrugged off the adverse publicity surrounding its tax bill to post its highest quarterly rise for more than three years in the UK, boosted by demand for the latest smartphones.

The mobile giant's domestic revenues rose 7 per cent to £1.2bn in the three months to the end of December and it signed up 195,000 new customers during the quarter to bring the number to 19.1 million. The group said its data revenues were up almost 30 per cent in the third quarter as the use of smartphones rocketed. The UK leads Europe in smartphone adoption, Vodafone's chief executive Vittorio Colao said yesterday. He added: "The population in the UK is more digitally advanced than the rest of Europe. The British are good digital citizens." During the quarter, 5.3 million, which amounts to 28 per cent of all Vodafone's customers in the UK, used a smartphone. In Europe, the figure was closer to 17 per cent.

Vodafone's total revenue was up 3 per cent year on year to £11.8bn, its fifth quarter of improvement in a row. There was strong growth in India and Turkey as well as from Vodacom in South Africa. This group also revealed it had been touched by the troubles in Egypt. It has evacuated all its ex-pats, after two employees were injured in the clashes.

Nick Clark