BT profits fall, costs rise, customers flee

BT Group posted a 6.2% decline in its fourth quarter profit, as costs rose and it lost some wholesale customers to broadband services, an Associated Press report said.

Net profit fell to £426 million pounds (€534 million) in the three months ending March 31, compared with £454 million (€571 million) for the quarter a year ago.

Revenue rose 2.5 % to £5.42 billion pounds (€6.81 billion) from £5.29 billion (€6.65 billion) a year ago, the report added.

The company said it incurred costs of £110 million pounds (€138 million) in the quarter to cut jobs and reorganize the company.

Wholesale revenue has fallen as demand for broadband has increased in Britain, leading Carphone Warehouse Group and British Sky Broadcasting Group to 'unbundle' lines, rolling out their own infrastructure and ending rental agreements with BT's wholesale unit.

Full year profit dropped to £1.74 billion (€1.38 billion) from £2.85 billion (€3.58 billion) in the previous year.

Annual revenue rose 2.4% to £20.7 billion (€26 billion) from £20.22 billion (€25.43 billion).

Despite the decline in net profit, the company's shares rose 2.6% to 229 pence (€2.88) amid the strong revenue and relief the results had not fallen short of analysts' expectations, as they did in the third quarter.