BT and KCom on a superfast roll

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TELECOMS groups BT and KCom said they are making progress amid tough markets, helped by rolling out super-fast fibre optic broadband internet.

Telecoms giant BT said it is now the UK’s biggest fibre broadband supplier, overtaking Virgin Media, with more than 13m homes now passed by its service.

Smaller rival KCom is also rolling out a fibre optic network in its Hull and East Yorkshire heartland.

After passing almost 16,000 homes and businesses by the end of 2012, it is extending the service to a further 30,000 properties. This will mean 30 per cent of KC’s telecoms network is covered with fibre broadband by 2015.

Fibre optics offers much faster speeds than copper line broadband, although customers must pay a premium. It caters for the increasing number of households watching internet TV, downloading music and films and generally using much bigger volumes of data.

KCom said its KC division – formerly Kingston Communications – made a “strong contribution” to its third quarter trading, spanning the October to December period.

KCom does not report quarterly profits but said it has “positive momentum” across all brands.

Pre-tax profits at BT increased seven per cent to £675m during the final three months of 2012, beating expectations, despite a six per cent fall in revenues to £4.5bn.

Telecoms firms are battling stagnant spending by businesses, which are postponing or cancelling big IT upgrades.

“Companies are being very much more cautious about spending,” said KCom chief executive Bill Halbert.

“We are seeing a lot of slippage from quarter to quarter.”

However, KCom said the public sector remains an “important opportunity for growth”. It has been named preferred bidder by East Sussex County Council to provide a hosted ‘cloud-based’ managed communications service for organisations including police, fire, schools, councils and the NHS.

The service is part of a public services network (PSN), where organisations pool IT and communications resources. “That’s all to do with saving money and cutting cost,” said Mr Halbert.

The group is waiting for a decision on its bid to create a PSN for Cheshire, and has other bids in the pipeline. It has also won a services and support deal with National Rail Enquiries.

BT’s Global Services arm, which serves multi-national organisations, secured £1.9bn of new orders, up 17 per cent year-on-year.

While the division’s revenues fell eight per cent to £1.7bn, its underlying earnings were up 13 per cent to £163m.

KCom said it has started its latest fibre roll-out phase in business parks and residential areas. Its fibre network typically offers speeds of 45-100 megabits per second (mbps), although for very heavy users it has a 350mbps contract.

“We are seeing significantly increasing demand on the network,” said Mr Halbert. “It’s a result of internet TV, multiple devices in the home, teenage kids using tablets.”

BT’s Infinity fibre broadband service offers download speeds of up to 76mbps, although it is increasing this to about 330mbps “on demand”.

BT said its £2.5bn fibre roll-out is now passing around 100,000 premises a week. Around 1.25m customers have signed up to the faster broadband, with about a million of these BT retail customers and the balance with re-sellers such as TalkTalk and EE.

The group said more than a million customers in Yorkshire and the Humber region have access to fibre, and this will increase to 1.2m by the end of the year.

“Our fibre plans are helping to make the UK a broadband leader in Europe,” said BT chief executive Ian Livingston.

“Our engineers have worked tirelessly following some of the wettest weather on record. Not only did they complete a record number of field visits in the quarter, they also connected a further 281,000 homes and businesses to broadband and helped us grow the number of landlines.

“We have made progress in a number of areas and delivered solid financial results. These are in line with our expectations for the year, which remain unchanged.”

john.collingridge@ypn.co.uk

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