BT not to enter price war as broadband growth slows

UK telco BT today said it was not interested in entering into a price war with players like BSkyB, as it offset slower broadband growth in its second quarter with customers paying more for superfast internet connections and sports TV Reuters reported.

Recent years had seen the 168-year-old former monopoly transform its business with investments in a new fibre network and sports television service offerings for broadband subscribers to increase customer loyalty.

BT said yesterday that broadband customer additions numbered 88,000 in the quarter, 48 per cent of the net new additions to the UK market. This was down from earlier growth levels, with BT blaming competitive offers from rivals.

The consumer business revenues of the  group however grew by 7 per cent, with customers paying more on average as one in three broadband customers opted for the faster fibre product.

Following a strong run in the days ahead of earnings, BT shares fell 3.5 per cent in early trade, underperforming the market, as investors rushed to take cover ahead of the  price war.

Meanwhile, BT chief executive Gavin Patterson told reporters the company would not offer bargains to match rivals.

"We will remain very disciplined. We're focused on profitable revenue growth and while we've sharpened our offer a little bit it's not to the same extent that some of our competitors did," he said.

"We can afford with our offer to focus on fibre, to focus on BT Sport, to ensure we're competitive but not chasing volumes for the sake of it."

Meanwhile, CITY AM reported that broadband customer growth at BT helped boost the company' profits 13 per cent in the second quarter as the former state monopoly's free BT Sport offering continued to win customers for the FTSE 100-listed firm.

Regarding the modest growth in broadband subscribers, BT said in a result statement, ''Our share was lower than in recent quarters due to strong promotional activity in the market.''

The numbers had some investors sell down stakes in the firm, which pulled shares 2.02 per cent down during trading yesterday to 367.90p.

According to Patterson, the company's consumer business continued to perform well thanks to the impact of BT Sport where Premier League audiences were up around 45 per cent on average.

Fibre was also driving growth with one in three of its retail broadband customers enjoying super-fast speeds, he added.