BT profits hit by Italian scandal
BT profits have slumped by 42 per cent in the first quarter of its financial year after it took a mammoth charge relating to its Italian accounting scandal.
Profits fell to £418 million as it agreed to pay £225 million to Deutsche Telecom and Orange in a bid to avoid legal action in the wake of the scandal which saw BT book a £530 million write down earlier this year.
The payout relates to the sale of EE by the duo to BT for £12.5 billion, which left Deutsche Telekom and Orange with stakes in the British firm.
The share price fall following the Italian scandal knocked £8 billion from BT's market value and meant it was open to legal action from shareholders.
Despite this, revenue climbed by one per cent to £5.8 billion in what boss Gavin Patterson called an "encouraging performance".
Chief executive Mr Patterson said: "BT has delivered an encouraging performance in the first quarter of the year. We've made good progress in our key areas of strategic focus.
"In particular, I'd highlight the growth achieved by our consumer facing businesses, helped by mobile."
The company said the Government's forthcoming auction of the new 5G mobile spectrum would allow it to bid for the new superfast mobile internet speeds. It added that it was looking at how to roll-out further fibre to the premises broadband connections.
"Our new consumer business will operate our three distinct brands; BT, EE and Plusnet; to leverage our position as the largest and only fully converged player in the market, spanning fixed and mobile networks, consumer products and services as well as content," Mr Patterson added.
"We will continue to simplify and streamline the business and rationalise our costs as demonstrated by our ongoing performance transformation programme.
"Our businesses are leaders in their core segments and as we drive the business forward I am confident in the outlook for our company."
