Group results
First quarter ended June 30, 2008Revenue was 3 per cent higher at £5,177 million in the quarter with continued growth in managed solutions and broadband and convergence revenue. EBITDA before specific items and leaver costs increased by 1 per cent year on year. Earnings per share before specific items and leaver costs increased by 2 per cent to 6.1 pence.
Our BT Global Services business achieved contract wins of £1.9 billion in the first quarter, with £8.2 billion achieved over the last twelve months.
We had 13.0 million wholesale broadband connections (DSL and LLU) at June 30, 2008, including 4.8 million local loop unbundled lines. This represents an increase of 1.8 million wholesale broadband connections year on year. There were 338,000 net additional broadband connections in the quarter. Our retail share of those net additions was 103,000, being 31 per cent, and we remain the UK’s number one retail broadband provider with a customer base of 4.5 million at June 30, 2008, which represents a market share of 35 per cent.
Our BT Wholesale managed network solutions business achieved contract wins of £490 million in the first quarter, with £1.2 billion achieved over the last twelve months.
Revenue
Revenue was 3 per cent higher than last year, including a £93 million favourable exchange rate movement. Managed solutions revenue grew by 21 per cent to £1,408 million, and broadband and convergence revenue increased by 4 per cent to £640 million. Managed solutions includes revenue from our networked IT services, managed network solutions and MPLS. Broadband and convergence revenue includes revenue from broadband, LLU, mobility and convergence solutions. The growth in managed solutions was mainly due to 17 per cent growth in networked IT services and 36 per cent growth in MPLS revenue. This revenue growth in the quarter was partially offset by a 6 per cent decline in revenue from calls and lines to £1,647 million, together with a 7 per cent decline in revenue from transit, conveyance, interconnect circuits, WLR, global carrier and other wholesale products to £827 million.
Revenue from our Major corporate customer segment increased by 12 per cent to £1,961 million, reflecting the increased take up of our networked IT services, the impact of foreign exchange and recent acquisitions by BT Global Services.
Revenue from our Business customer segment (comprising smaller and medium sized UK businesses) grew by 5 per cent to £661 million, continuing the recent trend. This reflects both organic growth in the UK as well as the contribution from our acquisitions of Lynx and Basilica last year.
Revenue from our Consumer customer segment of £1,228 million was broadly flat year on year, with the impact of call package price reductions and a decline in calls revenue being offset by growth in broadband revenue. The 12 month rolling average revenue per consumer household increased by £4 in the quarter to £278, reflecting the increasing number of customers taking multiple services from BT. Increased broadband revenue and the growth of value added propositions per household, have more than offset the lower call package prices in the quarter.
Wholesale (UK and global carrier) customer revenue decreased by 7 per cent to £1,320 million as a result of the impact of volume and price reductions on DSL broadband and the decrease in low margin transit revenue and conveyance volumes, which was partially offset by growth in managed network solutions revenue, migrations to local loop unbundling (LLU) arrangements, and growth in global carrier revenue of 19 per cent.
