BT edges forecasts after Champions League drives TV take up
By Paul Sandle
LONDON (Reuters) - Britain's BT, riding high after receiving the go-ahead to buy mobile operator EE, just beat market expectations for quarterly sales on Thursday, helped by demand for its TV offer now showing Champions League soccer.
The market-leading broadband group said it had added a record 106,000 TV customers in the quarter, during which it started showing Europe's premier soccer competition.
Chief Executive Gavin Patterson said the contribution from BT Sports Europe had been better than expected and had helped drive a 7 percent increase in revenue at its consumer division.
BT's shares rose to a three-month high of 476 pence.
Analysts at Citi said the results were reassuring given that full-year targets had looked demanding.
They noted that quarterly TV customer additions were a record, "although not one that looks especially impressive to us against the scale of the opportunity and the cost of European football rights."
BT spent 897 million pounds to snatch the Champions League rights from rival Sky to complement its English Premier League line-up that has been the foundation for its TV business.
Patterson said it was "early doors" for Champions League, but he was pleased with the performance of the matches so far.
"In terms of the viewing figures, they compare well with what Sky was achieving last year - they're in line or marginally ahead," he said.
He also said demand for fibre broadband remained strong, with net additions up 21 percent, and its mobile customer base rose to more than 200,000, before it adds EE from Orange and Deutsche Telekom.
The deal, provisionally approved by the competition watchdog, will strengthen BT's ability to offer bundled services to customers. [nL8N12S12Z]
With the hurdle over EE seemingly easily cleared, BT's next challenge will be the regulator's market review. BT's rivals want to see the company forced to spin off its networks arm.
BT points to its improving record in service in response, and said it had hired 3,000 engineers in the last 18 months to help fix faults faster.
TalkTalk, a rival provider campaigning for BT to be split, has its own problem after falling victim to a high-profile cyber attack last week.
Paterson declined to say if BT had seen a spike in demand from unhappy TalkTalk customers but said cyber security was one of BT's core capabilities.
The group posted revenue of 4.38 billion pounds for the quarter, beating analyst forecasts of 4.3 billion pounds.
Core earnings fell 1 percent to 1.4 billion pounds, in line with expectations, which it said reflected investment in its sports programming.
(Editing by Kate Holton and Jon Boyle)
