BT almost doubled profits in the last quarter of 2010, even though total turnover was slightly down.
In the three months ended 31 December 2010 the telco made revenues of £5.038bn, down three per cent. But profit before tax was up 30 per cent to £531m.
BT added 188,000 DSL customers, a 53 per cent market share. Global Services is expected to create cash flow of £100m this year, rising to £200m next year.
Ian Livingstone, BT's chief executive, said: "BT Retail had a good quarter with growth in business revenues and our highest share of DSL broadband net additions for eight years. Openreach benefited from a stronger broadband market and growth in its copper line base.
"BT Global Services is now expected to be cash flow positive this year, a year earlier than targeted."
BT Global Services turned over £1.974bn in the quarter, down seven per cent on last year. BT Retail brought in £1.967bn, down three per cent.
BT Wholesale revenue was flat at £1.070bn, as was Openreach which made sales of £1.240bn and adjusted profit of £550m.
Earnings per share were 5.4p, up 32 per cent.
Apart from improving predictions for Global Services, BT said its outlook for the coming year was unchanged.