Report Overview

BT: Searching for the nadir

BT had a weak December quarter, with revenue falling 3% and EBITDA 4%, despite a recovery at Openreach, mainly driven by tough competition and regulatory hits, with operating metrics solid but not noticeably improving

These hits look set to continue, so the company’s hopes of a return to EBITDA growth in 2020/21 probably hinge on brand and service improvements actually becoming visible in operating performance

A successful full fibre roll-out would be a boon for BT in the longer term, and regulatory developments are headed in the right direction, if not quite there yet. However, its affordability without a dividend cut remains questionable in the current challenging environment

Contents

Revenue and EBITDA declines accelerate

Broadband churn still high, but some positive signs

Broadband revenue and ARPU hit by lack of price rise

Mobile still struggling with competition and regulation

Openreach rebounds, more to come

Guidance just about maintained, headwinds emerging

List of charts/tables

Figure 1: Implications of full fibre for UK telecoms players

Figure 2: Revenue growth

Figure 3: BT Group revenue and EBITDA growth

Figure 4: EBITDA growth by division

Figure 5: Broadband net adds (000)

Figure 6: Consumer fixed monthly churn

Figure 7: Fixed broadband complaints to Ofcom per 100,000 customers

Figure 8: BT Consumer fixed operating performance

Figure 9: Broadband entry level dual-play pricing, new customers (£/month)

Figure 10: Broadband high speed pricing, new customers (£/month)

Figure 11: BT’s mobile operating performance

Figure 12: Openreach revenue growth

Figure 13: Openreach FTTC monthly ARPU (£)

Figure 14: Openreach ultrafast coverage premises net adds (000)

Figure 15: BT Group guidance

Figure 16: Incremental headwinds to EBITDA