BT is still winning the lion's share of the UK broadband market, despite a rash of 'free' broadband launches by rivals. 

Carphone Warehouse, Orange and Sky have all launched home communications packages that include 'free' broadband for paying subscribers. However, BT's retail customer base has continued to grow.

Over the three months to the end of June, BT customer numbers grew six per cent to 2.8 million, including 30 per cent of new broadband sign-ups. Pre-tax profits for broadband grew from £511m to £615m.

BT chief executive Ben Verwaayen played down the challenge from cut-price competitors.

"There are now two markets for broadband," he said. "The pretty crowded one based on price alone, and the value proposition which we have created."

BT's bumper market share echoes its apparent popularity among users. As vnunet.com reported earlier this month, BT came top in a survey of 10 of the UK's largest ADSL providers.

The UK telco is also proving popular overseas. In a statement on BT's website, Verwaayen said: "Our international business is expanding strongly and we won more than 200 new customer accounts outside the UK in the quarter.

"Our first-quarter results underpin our confidence in our ability to continue to grow."

BT plans to keep up the pressure with the launch of BT Vision, its internet TV offering, in the autumn.