Profits at BT Group rose 20 per cent in the second quarter as it attracted 250,000 customers to its broadband services.
The telecoms group posted profits of £533m for the three months to the end of June, a fifth higher than a year earlier.
Ian Livingston, chief executive of BT, said the group had continued to make progress over the quarter, pointing to growth in broadband and the ongoing recovery at its global services business.
This came despite a 5 per cent fall in revenues to £4.7bn. BT Retail suffered from falling revenues from calls and its phone lines, marking a ninth successive quarter of declines.
Morten Singleton, analyst at Investec, said there were "no surprises" in the results, adding that the "cost-cutting story continues to demonstrate further mileage".
Elsewhere, rival broadband group TalkTalk revealed it had suffered further customer losses during the same three months, and revenues had declined from £444m a year earlier to £423m. Mr Singleton said the shares would drift "until evidence of a turnaround emerges".