BT slides are out. Slides to look at:

Slide 11:
- BT Sport cost £140m to operate in the quarter (NB not a full quarter of PL)

Slides 22/23:
- Consumer revenue up 4% to £980m - calls/lines down 1%, broadband/TV up 17%
- Consumer EBITDA down 13% to £429m

Slide 24:
- Broadband net adds graph - as previously posted see growth from previously generally around 50% to 93% this quarter
- TV net adds graph (ie BT Vision / BT YouView) - 70,000 - best for a long time by miles
- Consumer line loss graph - massively reduced losses - this is important - it's not just about broadband - major knock-on impact on lines business

Slide 25:
- Over 2m retail customers - ie just under 1m BT Vision / BT Youview, just over 1m BT Sport on Sky
- Reach approx 4m homes - includes just under 2m VM
- PL audience share over 70% above ESPN - note the word share - not audiences - share = % of people watching TV at the time
- Aviva rugby audience above Sky Sports (not stated how calculated!)

http://www.btplc.com/Sharesandperfor...213_slides.pdf

We don't know how many of the 900k BT TV customers have activated BT Sport (they had to start a new contract) and how many of the 1m 'BT' customers are viewing on line with the app (no new contract required).

BT reported there had been 1m downloads of the app.

Minor correction to above:

It is actually Retail EBITDA which is down 13% to £429m (Retail = Consumer + Business).

Consumer EBITDA has not been reported.

To clarify a bit further:

Revenue:
Retail - up 2% (Consumer up 4%; Business broadly flat)

EBITDA:
Retail - down 13% (no split given between Consumer and Business)

So, (at least as far as I can see), BT has not reported EBITDA for the Consumer business. But if, hypothetically, EBITDA for Business is flat (we know Business revenue is flat and Business is completely unaffected by BTs Sports's costs so Business EBITDA should be at least in the region of flat) then Consumer EBITDA could be down around 26% (ie average of 0 and -26 would be -13 - both segments are very close in size).

So that potentially is a pretty big hit to the profitability of the Consumer business - but not something that should surprise us as we know that BT Sport represents a very substantial investment (£140m of costs in the quarter).

Share price movements today:

BT - up 2.0%
Sky - up 0.4%

(FTSE 100 - down 0.7%)

So a positive reaction from the market - and I think that's right. After looking at generally fairly disappointing ratings for BT Sport over the last couple of months these results today show BT Consumer metrics - ie lines, broadband and TV - that are all very positive indeed and they are feeding through into revenue growth after a long period of revenue contraction.

BT Sport represents a substantial investment to achieve those positive metrics and revenue growth but we already knew that anyway. BT Sport is generating substantial results - that doesn't mean the scale of the investment is or will be justified (EBITDA is substantially down) but at least at this early stage we can say that it is generating substantial results.

And TalkTalk down 1.2%

I think it may have been you who said it matters less whether or not people watch the channel a lot, it's more that they have a perception of getting value for money and therefore stick/move to BT. These figures and BT Sport's viewing figures seem to support that theory.

Can I just ask very quickly and summing up....are these good promising overall figures for BT?

Yes and financially they beat expeectations - see earlier posts.

Agree with your conclusion but just to say that beating expectations re financials is re the company as a whole (and of course share price response is looking at results for company as a whole).

BT Consumer (and even BT Retail) is only one segment of the company.

From memory I think loyalsince originally made that point and it is a very good and important point.

Thanks.

As I said previously, I'm no expert on telecommunications (and my earlier post made a schoolboy error with regards subscriber numbers and who their provider was) but I would make three further points.

1. This quarter likely to be the strongest for BT, I would be surprised if anywhere near the same broadband growth occured in future periods, as BT Sport won't lauch again.

2. Christmas is critical for BT. Their most marketable games are (2 Merseyside Derbies, 2 Spurs V Man U, Arsenal V Man U, Man City V Liverpool, Man City V Arsenal, Spurs V Man City) These are probably the biggest eight games that they will show, all in less than 80 days. This block is their last real chance until next Summer to advertise strong content.

3. With the above will they gain much credibility. i.e. will people appreciate that probably just over half of the big matches in the 80 day block are on BT? On this point I think there will be a few posts but nothing substantial. (i.e. referenced in an online post by Sale or someone) until Arsenal V Man Utd which is BT's biggest match by far. This will probably be picked up in a main article, and twitter (and dare I say it this forum) will be packed with people asking why it is not on Sky.

Also how have PL rights been accounted for? On payment to the PL, or cost accrued monthly? i.e. there is a large payment made twice a year to the PL from memory?

All UK company accounts are prepared on an accruals basis - ie when the cash is paid is irrelevant.

Whether they do it straight line over the 9 month season or on a match by match basis I don't know.

If match by match they will have charged 6/38 of the cost to the P&L in the quarter.

But however precisely calculated they will have charged well under 25%.

What happens long term going forward is key.

I said earlier that BT may have gained approx an extra 72,000 broadband subs because of BTS (post 2473). Let's assume that means 72,000 broadband subs with phone line and calls.

What is ARPU for BT broadband + phone combined? Don't know but say £40 per month? That would be £33.33 exc VAT = £400 per year.

72,000 @ £400 = £29m revenue per year (and that's not all 100% profit - there will be some incremental costs).

..... and BT Sport has annual running costs of £500m !!!!!!!

Of course BTS will also generate revenue through fibre upgrades, £12/£15 BTS subs, BT Vision / BT YouView subs and VM wholesale revenue.

But the big point to understand is that this is a very, very long term project. BTS needs to generate more in the region of 1 million extra broadband / phone subs to be worthwhile (even at this cost base).

I think 72,000 (approx) is an excellent start for the first quarter but it is very, very early days.

We won't know if BTS has been a success literally for years.

Interesting fact from presentation - a bit off thread but I think it's worth posting:

BT has 80 different call centres which have less than 100 people in each

= huge opportunity for rationalisation

= huge opportunity for cost savings

(which may = opportunity for more investment in other areas - eg BTS???)

Bit in brackets is my thinking - not said by BT!

Well they have gained me as a BT Infinity Broadband subscriber from today - but I now get my BT Sport for free so they are £3 per month better off and I am £22 per month better off - paying £12 less per month for BT Sport and £10 less for broadband (maybe some unique circumstances in play in my case though which explain the broadband cost reduction).

The figures announced today are good for BT but the audience response to BT Sport in terms of viewing figures and share is pretty disappointing. We should not forget that this has been a honeymoon period with the quarter in question covering the launch of BT Sport. Therefore a lot of the figures are likely to be a gross distortion of the future position.

One query - If BT had 156,000 net broadband adds and Sky 111,000 as quoted earlier I fail to see how BT could have had 93% of net broadband adds What is Sky's % on that basis?

BT - up 156,000 (93%)
Sky - up 111,000 (66%)
Rest of market - down 99,000 (minus 59%)
Total market - up 168,000 (100%)

Patterson (BT CEO): "difficult maintaining 93% share of broadband net adds going forward"

Its difficult as we don't know the level Al-Jazeera/ ESPN bid, and on which packages, but lets say BT won, but won B and F (for ease they would get 30 17.30 Sat games and 8 games on a Sunday lunch).

With that and Aviva Premiership, could they have had similar results broadband wise, but spent a load less?

I'm unsure as to the extent of BT's marketing too. I'd guess that there is a set percentage who will get BT Sport, as long as they show some Premier League, I'd love to sit down and analyse in detail whether all the marketing has been VFM.

Of course, this time next year we will be able to make much more confident assertions as to the success of BT Sport, and whether BT will go all out 2016-2019, or go for 38 games at a reduced price (lesser quality but better time slot.)

Its looking too far ahead, but if packages stay the same, I could, if pack F is 8 2nd picks after C and E pass, see Sky going for B,C,D,E,G

From presentation:

BT Sport EDITDA = minus £100m

ie

Revenue = £40m
Costs = £140m
"Loss" = £100m

But that revenue figure of £40m is only direct BTS revenue - ie just £12/£15 subs, VM, advertising - ie not counting any broadband / phone revenue from anyone.

Then X-ref back to Retail EBITDA is down £66m means Retail excluding BTS is up £34m - assume Business flat - implies Consumer EBITDA is up £34m before "direct BTS loss" of £100m takes you back to overall Consumer EBITDA down £66m.

Could anyone hazard a guess of what that breakdowns down as? And does it include rights costs? If so, for the three months until the end of September, they screened six PL games.

6 x £6.3m = £37.8m

Which is not £140m, meaning they spent over £100m(!) on other content.

Q3 could be better for them, but costs will surely be substantially higher given that it accounts for 13 PL games. 13 x £6.3m = £81.9m.

Unless I've missed something?

they are playing a long game

I switched to BT - so I pay them an extra £200 a year, say, for a lot of years.

that's good business for them, the marginal cost to them of whatever I do on line must be virtually nil.

In other words, the BT Sport channels have successfully helped to stem the haemorrhage of broadband customers to Sky and senior BT executives will no doubt be pleased but it has come at some considerable expense.

£140m is the total cost of BT Sport for the quarter - content plus a whole host of other things - production, talent, studios, transmission, marketing, admin etc etc.

In particular marketing over the launch period would have been enormous.

There would also have been significant one-off costs associated with pre launch and launch.

Analyst asked question re CL rights.

Patterson gave answer making various points - eg always planned to be number 2 not number 1, Sky very strong position, will be prudent, disciplined approach, examine all opportunities etc etc and then finished with these words:

"We don't need to necessarily gain any more rights to deliver what we need to with the channel"

Patterson:

- No commercial negotiations with Sky re Sky Sports at the moment.

- Court of Appeal will hear BT appeal against CAT decision just before Christmas (not sure if he means verdict due then - I thought we had already heard that the appeal had taken place).

- Expect to hear from OFCOM in the New Year re complaint about not being able to show Sky Sports on BT YouView.

Interesting point on fibre net adds - fibre net adds did not improve at all vs previous quarter.

Analyst said that surely part of BT Sport proposition was to drive fibre adds.

Patterson said he was disappointed with fibre adds but main objective of BTS was to drive broadband as a whole. Also said call centres couldn't make so many outbound calls to sell fibre as busy with BTS.

One plus point is that although fibre adds didn't increase, 1/3 of fibre adds were new customers whereas before it was only 1/5.