BT has shrugged aside mounting competition from BSkyB, AOL and Carphone Warehouse to tighten its grip on Britain’s broadband market, it emerged today.

Results from the telecoms group showed that it signed up nearly four in every ten customers buying broadband across the country in the three months to June 30, far higher than expected.

Analysts predicted that BT Retail’s share of the broadband market, excluding cable, would slide to below 30 per cent in the quarter, the first of the company’s financial year.

However, BT today said that its share had climbed to 38 per cent, with the business winning 175,000 new customers taking its total to more than 3.8 million.

Separately Carphone Warehouse, which last year sparked a storm by offering ‘free’ broadband, revealed it signed up 126,000 in the same three months.

Earlier this month BSkyB, 39.1 per cent owned by News Corporation, parent company of The Times and Times Online, revealed that it had won 259,000 new broadband customers, taking its total to 716,000.

Ben Verwaayen, BT's chief executive, said today: “We have got the year off to a strong start with another robust all round performance.”

The sharp growth in the take-up of ‘new wave’ services such as broadband helped BT to offset a continuing decline in traditional fixed-line services and push first-quarter pre-tax profits up 3 per cent to £658 million.

Revenue from traditional services fell 5 per cent in the quarter to the end of June, while New Wave revenue rose 11 per cent to £1.8 billion.

The average annualised spend per BT customer is up £4 at £266.

Carphone Warehouse, which bought AOL for £370 million last October, insisted its Talk Talk broadband business was also making good progress.

It now has a total of 2.4 million broadband customers and 40 per cent are now on its own network, as opposed to lines operated by BT’s Wholesale division.

Carphone last week announced plans offer a free Dell laptop with any two-year AOL broadband subscription in a bid to drive business.

New mobile phone connections at Carphone rose 19.9 per cent in the quarter, helping to drive distribution revenues up 11.7 per cent to £706 million.

Charles Dunstone, Carphone's chief executive, said: “We have started the year well.

“Customer demand for broadband and wireless solutions for the home is still increasing.”

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