BT's first-quarter results for 2007/8 showed a modest three per cent growth in group revenue and profit over the same period last year. Profit for the quarter was £0.7bn on revenue of £5bn. 

Three per cent may not seem like a stunning performance but, unlike many other telcos, BT does not have a large mobile division to drive growth.

"To achieve consistent growth as a fixed line business is a considerable achievement," Mike Cansfield, telecoms practice leader at analyst firm Ovum, told vnunet.com. 

BT's global business, which has previously grown at double-digit rates, slowed to five per cent growth over the quarter.

But BT's wholesale division has recently struck deals with T-Mobile and Royal Mail and is set to become the company's star performer, according to Cansfield. 

"If [BT Wholesale] can continue to win deals of this type under new chief executive Sally Davis it will show that investment in 21CN was a means to turn the network into a source of new revenues and much more than a network upgrade," he said. 

A fifth of BT's revenue derives from networked IT services. "BT is no longer a traditional telephony-only business," said Cansfield. "We can expect more to be driven by software and IT in the future."