Report Overview

UK BT – Fibre up, dividends down

BT’s March quarter appeared to have been going reasonably well until COVID-19 hit, with full year guidance still being broadly met, but the new financial year will be hit harder, with BT Sport, SME and new fibre connection revenue particularly vulnerable

BT’s full fibre roll-out has been temporarily slowed by COVID-19, but it is accelerating its ambitions regardless increasing both its 12-month (4.0m to 4.5m) and longer term (15m to 20m) coverage targets

BT is suspending and then rebasing its dividend, in part to cover the above costs. While we regard BT’s fibre investment as a good one, investors and analysts alike have been frustrated by a lack of clear multi-year guidance of the benefits, perhaps as a result of BT not wanting to reveal its negotiating hand to the regulator, government and retail partners

Contents

COVID-19, fibre and dividends dominate

Group financials solid until CV-19 hit

Broadband volumes a touch weak, churn no better…

…but ARPU and revenue growth improve

Mobile improves, but challenges to come

Openreach steady, but CV-19 hit to come

Full fibre accelerates

Guidance suspended due to COVID-19

List of charts/tables

Figure 1: Openreach full fibre build plans (net adds, m)

Figure 2: COVID-19 impacts on BT Group

Figure 3: Revenue growth

Figure 4: BT Group revenue and EBITDA growth

Figure 5: Broadband net adds (000)

Figure 6: Consumer fixed monthly churn

Figure 7: BT Consumer fixed operating performance

Figure 8: Broadband entry level dual-play pricing, new customers (£/month)

Figure 9: Broadband high speed pricing, new customers (£/month)

Figure 10: BT’s mobile operating performance

Figure 11: UK contract net additions (000)

Figure 12: Reported organic mobile service revenue growth

Figure 13: Openreach revenue growth

Figure 14: Openreach FTTC monthly ARPU (£)

Figure 15: Openreach ultrafast coverage premises net adds (000)

Figure 16: Openreach full fibre build plans (net adds, m)

Figure 17: BT Group guidance and results