Report Overview

UK’s BT: Bumps on the road to recovery

BT suffered a weak Q2 with revenue and (particularly) EBITDA declines accelerating, but this was mainly down to timing (particularly at Openreach, which will likely recover in Q3), with the company confident in maintaining full year expectations.

BT’s fixed broadband business enjoyed some recovery as the pricing environment improves, but will suffer another price timing bump next quarter, and its mobile business is suffering from a tough market environment that is unlikely to improve in the short term.

The company is busy re-branding, re-positioning and transforming, but the outlook for football rights costs and fibre roll-out regulation will dominate in the short term, and further bumps (such as the Virgin MVNO contract loss) may emerge.

Contents

Revenue and EBITDA declines accelerate

Broadband solid, but some pain to come

Reality bites mobile a bit more

Openreach hits a bump, but outlook still strong

Guidance maintained, outlook remains balanced

List of charts/tables

Figure 1. AEBITDA growth by division

Figure 2. Revenue growth

Figure 3. BT Group revenue and EBITDA growth

Figure 4. Broadband net adds (000)

Figure 5. BT Consumer fixed operating performance

Figure 6. Broadband entry level dual-play pricing, new customers (£/month)

Figure 7. Broadband high speed pricing, new customers (£/month)

Figure 8. BT’s mobile operating performance

Figure 9. Openreach FTTC ARPU (£)

Figure 10. Fibre take-up (FTTx)

Figure 11. Openreach ultrafast coverage net adds (000s of premises)

Figure 12. Openreach/CityFibre overbuild stats

Figure 13. Selected Openreach FTTP list prices (£/month)

Figure 14. BT Group guidance

Figure 15. Incremental headwinds to EBITDA