A solid first quarter for the telecoms giant

The UK's largest fixed-line telecoms operator said first quarter pre-tax profits rose to �499m ($875m), while revenue improved 5%.

Revenues also got a boost from recent acquisitions Infonet and Radianz and the buyout of Italian firm Albacom.

"This has been a great first quarter," said chief executive Ben Verwaayen.

BT's shares closed up 2.5% at 229 pence.

BT Group said global orders for IT services were worth �2.4bn in the three months to 30 June, including a deal with the UK Ministry of Defence.

IT services orders topped �8bn during the last 12 months, a company record.

Competition pressure

Profits were also helped by a 48% rise to �1.38bn in "new wave" services, the phone company's term for newer products like broadband internet and mobile services.

The number of wholesale broadband connections in the year more than doubled to �5.6m.

BT is keen to increase profit margins in "new wave" services to counter growing competition in traditional fixed-line services.

Revenues from its traditional businesses fell by 6%.

The decline was due to increased competition, price cuts and changes to encourage customers to take up new wave services, BT said.

In June, BT Group agreed to offer rival operators equal access to its UK fixed-line network to avert the risk that regulators might order the company to be broken up.

After talks with telecoms watchdog Ofcom, BT agreed to set up a separate business unit to provide other telecoms operators with equal access to its UK-wide local network.

The move followed complaints from rivals that the ex-monopoly's network-owning wholesale division was giving preferential treatment to BT's retail arm.