BT, the telecoms giant, yesterday said that it plans to deliver television down phone lines once it has upgraded its network to support the delivery speed required.

The company, reporting its full-year results yesterday, wants to introduce video on demand services for its broadband customers, in the belief that internet TV will provide badly needed revenue growth.

Ben Verwaayen, chief executive, said: “Providing ‘me too’ television does not make sense, because broadcast is a well developed market. But there are video services around work, education, entertainment and communication that we could provide soon.”

The delivery of good quality television pictures down a telephone line is a long-standing goal at BT. However, it requires a broadband connection that operates at two megabits a second, four times faster than typically available today.

Later this year BT plans to introduce what is dubbed “booster” technology that will allow customers to download video in specially priced high-speed bursts. A full upgrade of BT’s network to accomodate the speed required will follow shortly after as part of its “21st century network” programme.

Yesterday’s results for the year to March showed how crucial broadband growth is for BT. The company unveiled revenues of £18.5 billion that were flat overall despite major underlying movements.

Mounting competition in the voice market from the likes of Centrica’s One.Tel and Carphone Warehouse’s TalkTalk pushed revenues from the company’s traditional telephone services down 5 per cent at £15.1 billion.

The deficit in traditional business was offset by a 30 per cent jump to £3.4 billion in “new wave” turnover from services such as broadband and computer services.

BT did better in the fourth quarter, growing revenues by 1.4 per cent to £4.79 billion, at a time when few City analysts thought that it could.

Executives refused to say if they believed the company could sustain turnover growth. Sir Christopher Bland, chairman, said: “We’re more comfortable, yes, but we won’t be giving any revenue guidance. We’re very pleased with our result, but it is a single quarter.”

Between January and March, the company generated £291 million from what it classes as new activities. Of this, £87 million came from broadband customers, and currently 5,000 people a day are taking a connection that relies on its network.

Pre-tax profits were down 38 per cent to £1.95 billion, although the prior figure was boosted by asset sales. On a comparable basis, pre-tax income grew by 10 per cent, reflecting continued cost cutting and reduced interest payments on a debt pile that was trimmed to £8.4 billion.

The deficit in the company’s pension fund, the largest private sector scheme in the country, eased by 43 per cent to £3.6 billion on an FRS 17 basis. BT took advantage of a windfall to pay £380 million into the fund to help plug the shortfall. The company will pay a final dividend of 5.3p, making 8.5p for the year, an increase of 31 per cent. The shares added 5¼p to 178¾p.