Germany feels the heat of BT’s anger

BT hit out at German protectionism as a fresh wave of takeover talk lit up the telecoms sector.

Chairman Sir Christopher Bland warned there was ‘ a real risk of Germany adopting a semblance of a protectionist approach’ after Deutsche Telekom looked like being granted a regulatory reprieve while it carries out a £2bn network upgrade at home. BT must open up its own network while spending £10bn.

Boss Ben Verwaayen insisted his transformation was on track despite the fact that BT’s retail arm shed another 250,000 customers in the last three months.

Meanwhile income from corporate contracts and broadband access grew 25pc to £1.29bn.

It is still offsetting falling market share and phone calls income, while margins in its traditional business are higher. BT added another 171,000 broadband customers, taking its total to 2.11m.

Next year it wants to sell them TV and music services as well as Fusion, a hybrid landline and mobile phone.

Quarterly profits fell 14pc to £489m after BT set aside £ 70m for the creation access division Openreach, insisted on by regulator Ofcom. BT hiked the dividend 10pc to 4.3p.

Sales rose 5pc to £4.82bn. Gross margins dipped to 28pc from 31pc. ‘ Any level of weakness is likely to be badly received,’ declared Nomura analyst Chris Alliott as the shares fell 61⁄ 2p to 208p. ■

Some 40,000 small shareholders in the Hull area could get a windfall after local phone company Kingston Communications (up

81⁄ 2p to 641⁄ 2p) received an approach, thought to be from a private equity firm. Most Kingston investors bought in when it floated at 225p a share in 1999.

Hull City Council, which still owns 31pc, will call the shots. It would get £128m if Kingston goes for 80p a share.