See BT shares

BT reported pre-tax profits to �1.035bn for the six months to 30 September, down 17% on the same period last year.

The �450m price tag of creating a new organisational structure to regain its competitive advantage was partly to blame, the group said.

BT has been making big strides into all-inclusive payment plans in an effort to offer cheaper calls and win back its customers.

Shares in BT fell in early morning trade, dropping 10.75p, or 3.4%, to 304.25p.

Future bright?

Despite the fall in profits, the company said its long-term future remained bright.

"We are achieving significant transformation of our business which will deliver further efficiencies alongside faster, better, smarter services for our customers," said Ben Verwaayen, BT chief executive.

Increased demand for its broadband and corporate networked IT services boosted revenue for the six months to the end of September.

But this was largely offset by the decline in BT's traditional fixed-line business, which meant overall revenue rose a modest 3% to �10.12bn, from �9.8bn.

The group said it remained the UK's number one broadband provider more than four million broadband customers. This accounts for 35% of the market.