For the three months ended September 30, the London, UK-based carrier said net income rose 28% to 475m pounds ($905m), up from 371m pounds ($707m) a year earlier. Sales rose 4% to 4.94bn pounds ($9.42bn) from 4.76bn pounds ($9.08bn) in the year ago quarter.

This is now the eleventh consecutive quarter of revenue growth at the carrier, and new wave (broadband, services and mobility) revenues were again almost entirely responsible, with sales up 21% at 1.73bn pounds ($3.29bn). New wave sales now account for 35% of total group revenue.

Networked IT services revenues rose 10% to 1bn pounds ($1.9bn), while broadband revenue rose 39% to 486m pounds ($922m), and mobility revenue increased 4% to 72m pounds ($136m). Revenue streams from BT’s traditional businesses fell 4% during the second quarter, which the carrier blamed on continued regulatory intervention, competition, price reductions, and technological changes.

With 46% of UK households subscribing to broadband services, BT continues to be the second largest broadband provider in the UK, with just over 3 million broadband connections at the end of October, after adding 350,000 customers during the quarter.

Yet the numbers joining BT is still down from previous levels, and its share of new customers has dropped sharply as it struggles to compete with Orange SA, the Carphone Warehouse Plc, and British Sky Broadcasting Group Plc, all of which are now touting their own free broadband packages.

Chief executive Ben Verwaayen said churn levels at BT are lower than those of its rivals, and that while some customers are leaving BT for competitors’ free broadband packages, others aren’t swayed by price alone. The success of these newcomers to the broadband market is at the expense of cable and not BT, he said.

Meanwhile, the carrier’s four main units continued to perform well. The primary role of the newly created Openreach division is to ensure all communication providers have transparent and equivalent access to the BT local network. It employs nearly 30,000 people and its main products are wholesale line rental and local loop unbundling. Revenue at this unit rose 1% to 1.28bn pounds ($2.43bn) from 1.27bn pounds ($2.41bn) a year earlier, and earlier this week it revealed that it has now unbundled one million LLU lines. Once it reaches 1.5 million lines, it will be free to drop its broadband prices.

The main services arm of the UK carrier, BT Global Services, posted a 3% revenue rise in the second quarter to 2.15bn pounds ($4.09bn) from 2.10bn pounds ($3.99bn) a year ago. During the quarter, we signed 233 new accounts, said Verwaayen.

BT Global Services also posted 700m pounds ($1.33bn) worth of networked IT services contracts, including a seven-year deal with PepsiCo to provide and manage an integrated portfolio of services for their international division. BT also said it made good progress on its NHS IT program and is on schedule to meet its target of 18,000 connections to the system by March next year. Total orders in the quarter for BT Global Services amounted to 1.6bn pounds ($3.04bn). The Global Services results are an indication that the unit is taking market share from competitors, said Verwaayen.

Meanwhile, BT’s customer-facing unit, BT Retail, saw a 3% fall in revenues to 2.07bn pounds ($3.94bn) from 2.13bn pounds ($4.05bn) in the year-ago quarter, as the unit struggled to overcome a 9% decline in traditional revenues (voice), and absorb heavy price reductions in its inclusive call packages for the consumer market.

BT Retail recently launched a number of new services, including an online backup facility (BT Digital Vault), as well as broadband installation and PC trouble-shooting services such as BT Home IT Visit and BT Home IT Advisor. It is also to launch its IPTV service,BT Vision, next month.

The final unit is BT Wholesale, where total revenues rose 4% to 1.88bn pounds ($3.58bn) from 1.81bn pounds ($3.44bn) in the year ago quarter. A notable highlight for this division came in September when mobile phone giant Vodafone Group Plc said it would use BT Wholesale to provide its UK customers with Vodafone branded, fixed-line broadband services.

Meanwhile, the 21CN project is due to be launched in Cardiff this month, and Verwaayen said that over 100 UK cities have been prepared so far.

Despite the strong results, shares in BT fell 1.54% to 287.25 pence ($5.45) on the London Stock Exchange following the news over concerns about the slowdown in broadband customer acquisition.