BT rings in the profits with 41k new pay-TV subscribers

Having taken the ill-advised decision to sell off mobile phone arm BT Cellnet (now better known as o2) in the early noughties, BT has been faced with something of a quandary over the past few years: how to make money as the number of people clinging onto their landlines dwindles by the day. Third-quarter results out today, though, suggest that the phone giant might have found its silver bullet: pay TV services. According to its figures, over the last three months, it attracted 41,000 new subscribers – that’s more than Virgin and BSkyB put together. Not bad.

The results showed that although the last few months were tough for almost every sector, BT did surprisingly well, with pre-tax profits for the three months to the end of September up more than a third, to £552m. That’s despite the fact that revenue fell slightly to £4.9bn – which suggests that it’s cut more than a few costs (although it insists no job cuts have been made). All this has made investors very happy: share prices rose by 4% this morning.

The company said it had added 166,000 new (home) broadband customers, which brings its total to six million. And while pay TV was its real success story, it’s worth adding that with a total of 638,000 TV customers, it was (obviously) starting from a much lower point than either Sky, which has 10m, and Virgin, with 3.76m. Nevertheless, that addition of 41,000 represents a 6% increase on the previous quarter. BT Vision CEO Marc Watson tried to contain his excitement; ‘We are not getting carried away,’ he insisted. ‘We are a young business with a lot to do.’

This is all pretty good going for a business that, just two years ago, was battling mammoth pension deficits and union unrest. It’s an example of a business that’s managed to bring itself back from the brink during a period that saw better businesses go to the wall. Impressive stuff, wethinks. Just the sort of good news that the UK economy could do with more of…