Market Insight

BT broadband net additions and revenue up amid BT Sport push

January 31, 2014


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UK incumbent telco BT reported a strong quarter for TV and broadband services in the last quarter of 2013, with BT Retail consumer revenue increasing by 6% compared to Q4 2012.

BT has reported more than 2.5 million BT Sport customers, with the majority of these viewers accessing the channel via DTH and online platforms rather than BT TV. BT Sport has helped maintain BT’s position in the UK broadband market, with retail broadband net additions at 150,000 in the quarter, suggesting that BT’s strategy of using premier sports offering to boost broadband subscriptions is starting to bear fruit. BT closed 2013 with 7.1 million retail broadband subscribers, with 1.9 million customers having BT’s superfast fibre (VDSL and FTTP) broadband.

BT added 53,000 TV customers in Q4 bringing its total TV subscriber base to 0.956 million. In comparison, Sky TV added 77,000 customers, the highest net addition since 2010, boosted by its entertainment offer and connected TV experience.

OUR TAKE

BT has surpassed Sky in broadband net additions in the last two quarters following the launch of BT Sport in August 2013. Also encouraging is a decrease in the number of customers leaving BT. In the last quarter of 2013, BT lost 70,000 customers compared to 93,000 disconnected lines at the end of 2012. Additionally, demand for fibre-based broadband and sport offering has resulted in a 6 per cent revenue growth for BT’s consumer division, a best performance in over a decade.

However, BT Sport, which is available across devices and platforms for free to BT broadband subscribers, has done little to boost BT TV uptake. Though TV net additions in the quarter were more than double that of the same quarter last year, net additions saw a dip when compared to Q3 2013. This comes despite the launch of linear channels on BT TV in late 2013, the YouView set-top box and the announcement of additional sports rights in December 2013 (Live broadcast rights for the UEFA Champions League and UEFA Europa League for three seasons commencing 2015/16). It is also the first quarter since Q4 2012, when net TV additions for BSkyB have exceeded that on BT TV. BT’s TV proposition lacks the level of entertainment content and connected TV experience which is offered by Sky, the largest pay TV operator in the UK, through its OTT multiscreen services.

Yet, given that BT Sport’s role in BT’s overall strategy has been to protect its broadband line of business from competitors by offering the three TV sports channels at no extra cost to its existing and new broadband subscribers, with little focus on monetising TV, it appears that BT’s bet on sports has so far proved to be a right one.

Geography
UK
Organization
BT Group BT Vision Sky
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