Telecoms giant BT has missed market forecasts for its Q3 earnings after its wholesale division was hit by a drop in premium-rate service revenue.

Sales in the three months to Dec 31 rose % pct to £5.15 billion, below the consensus forecasts of £5.25 billion.

Core EBITDA, which strips out the ongoing costs of slimming down BT's workforce, increased 2% to £1.47 billion, marginally beneath the £1.48 billion consensus among analyst forecast.

Premium rate services fell by £65 million year-on-year. BT also saw weakness in transit revenues, where it connects calls on behalf of other companies.

Broadband price cuts reduced its wholesale revenue by £16 million. It also saw a £35 million drop in local loop unbundling, which is when other companies connect to their customers using BT's network.

Better health was seen in BT's global services division, which sells network and IT services to businesses, with margins rising to 10.9% from from 9.5% a year ago.

Retail division revenues grew 2% to £2.15 billion. It added 177,000 new broadband customers in the period to have a total of 4.25 million users at the end of 2008.

The number of customers using BT's digital TV on-demand service BT Vision also doubled during the quarter to 150,000.
Chief executive Ben Verwaayen said: "This has been another solid performance.'

Shares in BT fell 5% to 250.75p.