Investors should call on Vodafone rather than BT

Nick Raynor, investment advisor at The Share Centre explains why despite BT increasing its earnings forecast for 2010, investors should stay away.

"BT's latest results were a pleasant surprise for investors this morning - with profits up 13% during Q2.  Investors holding BT will also benefit from the slight rise in the interim divided, which increased 4% to 2.4p.

"The Global Services division was the shining light for BT as it saw profits increase by 50%, and the success of its Sky Sports service August is also positive for the company's growth - 50,000 customers have signed up so far.  However, the good news ends there as earnings at its retail business fell 4% to under £2 billion.

"We feel there are further struggles ahead for BT and recommend investors call it a day.  Investors interested in the telecoms sector can receive far better returns from Vodafone which currently offers a yield of 4.5% and exposure to emerging markets."