BT yesterday expressed confidence it could continue to grow revenues and profit, as a second successive quarter of year-on-year growth in core earnings ensured the UK telecoms group's results were in line with expectations.

Core earnings for the first quarter of its 2007 fiscal year,which ended on June 30, rose 2 per cent to £1.4 billion (€2.05 billion) on revenues 3 per cent higher at £4.9 billion.

Increasing revenues from "new wave" activities, such as broadband and private communications networks for companies, continue to offset the decline in sales from traditional services such as fixed-line voice calls.

The final quarter of 2006 was the first in 11 to show year-on-year growth in BT's earnings before interest, tax and amortisation (Ebita), and prompted a bullish outlook from management for 2007. Ben Verwaayen, BT's chief executive, said: "Our first-quarter results underpin our confidence in our ability to continue to grow our revenue, Ebita, earnings per share and dividends this year."

However, Ian Livingston, head of BT Retail, the consumer business, admitted the broadband price war could result in "churn" or lost customers.

BT Retail's market share of new customers taking broadband over digital subscriber lines slipped to 30 per cent at the end of the quarter, from 31 per cent at March 31.

Mr Livingston said that BT's new broadband packages, unveiled in June, had "gone down very well".