BT Group said BT Retail expects to build on last quarter's return to profit growth and deliver increased full year figures.
The division is also aiming to deliver savings of £400-500 million over three years by focusing on more effective use of online sales, service and billing as well as improved processes that will benefit BT customers whilst reducing costs.
BT Retail reported an eight per cent increase in secondquarter profits last month despite a four per cent decline in revenues.
The unit accounts for over 40 per cent of the group's revenues but has seen its core fixed-line business being hit by rising competition and falling prices.
BT, which employs almost 9,000 people in the Midlands, has sought to reverse this decline by focusing its businesses around broadband internet, a market which has been seeing strong growth, and by trying to keep costs down.
The update came alongside news BT has signed its first content deals for next generation TV with BBC Worldwide, Paramount and Warner Music Group.
The agreements bring the launch of BT's TV over broadband service one step closer.