(Bloomberg) -- BT Group Plc said it lost broadband and mobile customers last quarter as well as contracts from business customers, pushing sales lower as new Chief Executive Officer Allison Kirkby works to streamline the business.
Revenue fell 2% from a year earlier to £5.05 billion ($6.5 billion) in the quarter ending in June, the company said in a statement Thursday. Analysts had predicted sales of £5.1 billion, according to the average of estimates compiled by Bloomberg.
The biggest revenue declines in the quarter were at BT’s unit serving business customers, which is being overhauled to focus on more profitable contracts. The company is also dealing with tough competition in its domestic market as so-called alt-nets, smaller companies rolling out fiber across the UK, have poached customers.
BT said it lost about 28,000 consumer broadband customers from the quarter before, a decrease of about 0.3%, and about 15,000 postpaid mobile customers, about 0.1%.
Kirkby, who joined BT from Swedish telecom operator Telia Co., unveiled a cost-cutting program and dividend boost earlier this year that excited investors. The cost cuts helped the company increase earnings even as overall revenue fell. Average revenue per user for BT’s Openreach and consumer broadband products rose in the quarter after Openreach raised prices and the company added more fiber-to-the-premises customers.
Adjusted earnings before interest, taxes, depreciation and amortization rose about 1% from a year earlier to £2.06 billion. That compares to the £2.02 billion average estimate by analysts in a Bloomberg survey.
BT shares fell 2.3% to 136.50 pence at 10:24 a.m. in London trading on Thursday. The shares have gained 10% this year.
(Updates with additional context around revenue decline from the first paragraph)
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