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BT has usurped rival Virgin Media to become the UK's largest provider of broadband services.

The telecoms giant revealed it had secured an additional 800,000 broadband customers in the three months to March 31st, taking its total to 10.7 million.

Profits increased as a result, with a preliminary statement showing that underlying earnings before interest, tax, depreciation and amortisation reached £1.54 billion compared to £1.50 billion a year earlier.

Underlying earnings per share were up percent to 6.3 pence during the fourth quarter.

A "strong growth" in revenue from so-called new-wave services, such as networked IT services and broadband, drove the increase.

New wave revenue was up by a total of 14 per cent to £2,117 million over the quarter, accounting for 40 per cent of BT's total revenue.

Broadband revenue alone was up 32 per cent to £556 million.

In contrast revenue for BT's traditional fixed phone line business was down three per cent, a fall which the company said was in line with recent trends and a growing move by customers to new-wave services.

BT, which increased its total dividend for the year by 27 per cent to 15.1 pence, also announced plans to return £2.5 billion to investors through a share buy-back scheme over the next two years.

Welcoming BT's performance in the competitive broadband market, the group's chief executive Ben Verwaayen said he was "particularly pleased" that the company had become the country's top broadband provider.

"We have finished the year with a terrific all round performance. The figures show BT in great shape," he added.