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BT boss fights break-up as profit rises 14%

BT's boss has hit back at a report by U.K. lawmakers suggesting the company should be forced to sell off its network and broadband infrastructure business, Openreach, saying the move could create "huge instability".

Openreach is a BT subsidiary that owns the cables connecting people to the internet. Other telecoms operators and broadband providers need to use this infrastructure.

Last month, a report backed by 121 cross-party members of parliament said that, despite £1.7 billion ($2.42 billion) of taxpayers' money pumped into the construction of high-speed broadband, 5.7 million people across Britain cannot access 10 megabits per second internet speeds, a target required by the telecoms regulator Ofcom.

The lawmakers suggested that BT be forced to sell Openreach to boost competition. But Gavin Patterson, the chief executive of BT slammed the suggestion.

"The U.K. is an internet economy, it's the strongest internet economy in the world…so it's important that we get the right infrastructure, and I think we've had that," Patterson told CNBC Monday.

"We've put forward a basket of measures and I think Ofcom need to consider that against the risk of separation which will create huge instability problems across the whole of the market."


Patterson's comments come as BT reported results for the three months to December 31 in which revenue rose 3 percent year-on-year to £4.6 billion and adjusted profit before tax was up 14 percent to £928 million.

BT said that it had got record Openreach fiber broadband net additions of 494,000 in the quarter with revenue in the business up 3 percent.

The company's consumer revenue was up 11 percent with average revenue per user (ARPU) up seven percent. This was helped by the addition of 97,000 new TV customers, taking the base to 1.4 million and the consumer line base growing by 6,000, the first increase in over a decade.


Jason Alden | Bloomberg | Getty Images

BT also completed its acquisition of mobile carrier EE on January 29. A new division focusing on U.K. businesses and the public sector is being created by BT, it said in a statement. Patterson said that EE would keep its name.

The chief executive said the deal would bring £4.6 billion of synergies over the next five years.

"It involves keeping the EE brand to ensure we can meet the needs across the whole of the market, they serve very different markets, the BT brand and the EE brand, so we want to take advantage of that," Patterson said.

"There's a clear plan going forward and we'll go on and execute that."