Big business goes mad for fat pipes as BT stagnates

BT's financial results may be faltering but it appears its attempt to transform itself from a traditional telecoms provider into a jack-of-all-new-technologies is faring slightly better.

BT Group's first quarter results show a slight dip compared to the corresponding quarter - turnover was down from £4.586bn to £4.567bn, although pre-tax profit showed a rise from £512m to £536m.

The telco has also managed to cut down on its debt by seven per cent, leaving it now £8.317bn in the red.

BT's cash from its traditional business, including dial-up and fixed line phone services, also took a downward turn - dropping by six per cent, which BT said was the result of increased competition, price cuts, regulation and also a drive by the company to get users to switch to what it calls 'new wave' services.

New wave services - ICT, managed solutions, broadband and mobile and wireless services - saw a substantial uptake, with a quarter-on-quarter increase in turnover of 32 per cent to £936m, benefiting from the UK's switch from dial-up to broadband.

BT's wholesale broadband connections now number 2.7 million, while BT Retail has notched up 1.1 million.

Big business also has a taste for BT's new wave, with turnover from UK and international corporates up by 19 per cent for the sector, as companies moving from traditional voice networks to managed products.

As old-school voice revenues falter, BT is pushing its 'new wave' VoIP service to capitalise on the growth of broadband. Today it announced it is cutting the cost of subscriptions for some of its Broadband Voice packages and offering new subscribers to the evening and weekend plan three months' free rental.

While new wave tech might be bringing in the turnover, it's also draining the pocket too. BT Group operating costs rose by £74m in the quarter, which the telco put down in part to investing in new wave initiatives.