Revenue at BT Ireland grew by 5 per cent in the third quarter of the year, its results showed.

The Irish operation saw growth throughout its divisions, the company said.

BT Ireland's business also includes its Northern Ireland operations, where about half of its retail broadband customers have moved to fibre services. This trend has helped drive revenue growth, the company said.

BT Ireland has also been selected as a strategic partner with NI Direct to help improve access to government services in Northern Ireland.

The company, which employs close to 800 people in the Republic of Ireland, provides communications and IT services to the business, public sector and wholesale markets.

Its customers include the Department of Communications, Energy and Natural Resources, the Department of Social Protection, Bank of Ireland and Ryanair.

The company also provides wholesale broadband services for Vodafone Ireland's DSL customers, and most recently did a deal with Sky Ireland. Its wholesale division also works with UPC, Three Ireland and Telefonica Ireland.

Meanwhile, strong demand for broadband and tight cost control helped BT's group business offset the combined pressures of regulation and recession to post a better-than-expected 7 per cent rise in third-quarter pre-tax profit.

In a continuation of the strategy that has sent shares in the group to a near five-year high, BT said it had recorded profits in the three months to December 31st comfortably ahead of forecasts, off revenues that were down by 6 per cent.

The group was boosted by demand for broadband, both at the retail level directly to customers and in wholesaling the service to rivals, as an increase in the number of engineers it employs helped the group to rebound from the previous quarter which was hit by rain.

The group said it had now become the biggest fibre broadband network in Britain, overtaking Virgin Media, after it passed 13 million homes with the technology.

More than a million of its customers are now using fibre and the group hopes that the imminent launch of its BT Vision sports channels with Premier League soccer and rugby will encourage others to upgrade to the faster and more expensive product.

"More than 13 million premises can access our fibre broadband and we are passing around 100,000 additional premises every week," chief executive Ian Livingston said. "Take-up is growing strongly ... (and) this gives us an excellent platform for our push into TV and sport later this year."

The tight focus on costs and underlying improvement in trading has helped BT regain investor confidence in recent years.

Total operating costs were down by more than £1 billion in the last nine months alone, as the group improved terms with suppliers, used fewer contractors and third-party sources and benefited from improvements to the network.

That helped lift third quarter adjusted profits by 7 per cent to £675 million (€779 million), some 7 per cent ahead of consensus at €632 million.

Group revenues, hit by regulation and economic pressures in Britain and Europe where it serves multinational corporations, were down 6 per cent.

"As one of the few European incumbents increasing EBITDA, BT remains an attractive name in the sector," Berenberg analyst Stuart Gordon said. "The momentum looks set to continue with the cost-cutting efforts still bearing fruit.

"We expect modest upgrades to current consensus expectations for the current financial year driven by the acceleration in fibre and signs that Global Services is beginning to improve."

BT Global Services, the group's large division which deals with multinational corporations, also looked to be performing strongly with £1.9 billion worth of new orders. Mr Livingston said the unit was now more efficient but still had further room to improve.

"We have made progress in a number of areas and delivered solid financial results," he said. "These are in line with our expectations for the year, which remain unchanged."

Additional reporting: Reuters