Broadband and mobile price hikes help BT return to growth

  • Q1 revenue up 1%, profit up 2%
  • Consumer strength offsets business weakness
  • 40,000 BT employees on strike Friday and Monday
  • Stocks fall 6%

LONDON, July 28 (Reuters) – Rising prices for broadband and mobile phone contracts helped BT (BT.L) return to first-quarter sales growth, and the group said it was ” would stick to “above-inflation” increases next time. year to cover rising costs and fiber investments.

Britain’s biggest broadband and mobile phone provider, which has seen its annual revenue fall for five consecutive years, said it remained confident it would increase revenue this year after meeting market expectations with a 1% increase in the first quarter.

Its policy is to raise the price of most consumer goods by inflation plus 3.9%, resulting in a 9.3% rise in April. Inflation in Britain, which hit 9.4% in June, is at its highest level in 40 years.

Join now for FREE unlimited access to Reuters.com

Register

More than 40,000 BT workers will go on strike Friday and Monday over pay. The company granted a raise of 1,500 pounds a year ($1,824) in April, an increase of 5% on average.

Chief executive Philip Jansen said BT’s pricing was transparent and broadband at around £1 a day was “very good value for money”.

“We anticipate that this structure will absolutely remain in place into next year,” he told reporters. “We’re going to stick to the cap on that.”

He said plans were in place to minimize disruption and keep customers connected during the two-day strike. Read more

“I know things are tough in the current inflationary environment, but we are doing our best for all of our stakeholders,” he said.

BT shares were trading down 6% to 20-week lows after the update. Analysts said the pressure on its business operations, where revenue fell 7%, was “worse than expected”.

“The business is a challenge,” Jansen said. “We expect it will take several years for the business to regain a strong position, and we are working on the plan.”

BT reported core profit up 2% to 1.9 billion pounds ($2.3 billion) on revenue of 5.1 billion pounds in the three months to the end of June.

($1 = 0.8210 pounds)

Join now for FREE unlimited access to Reuters.com

Register

Reporting by Paul Sandle; Editing by Sachin Ravikumar, David Goodman and Jan Harvey

Our standards: The Thomson Reuters Trust Principles.

Casey J. Nelson