BT numbers disappoint but the future looks promising

UK operator group BT saw its revenues decline by 7% in full year 2020, but there are signs that it’s headed in the right direction.

“BT comes out of this challenging year as a stronger business with an even greater sense of purpose,” said BT Chief Exec Philip Jansen. “Our fantastic colleagues have shown the true colours of BT – delivering resilient connectivity, supporting families and businesses and helping to underpin the heroism of the NHS.

“A number of uncertainties have now been removed. The Wholesale Fixed Telecoms Market Review, 5G spectrum auction and the Government’s cash tax super-deduction give us the green light to build the UK’s next generation digital infrastructure even faster; today we are increasing and accelerating our FTTP target to 25m homes and businesses by December 2026 to deliver further value to our shareholders and support the Government’s full fibre ambitions.

“After a number of years of tough work, and as we look to build back better from the pandemic, we’re now pivoting to consistent and predictable growth. We are building a better BT for our customers, for the country and for those who work for this great company – now and in the future.”

Leaving aside the regular attempts to suck up to the government, these are all valid points. The increased FTTP target (previously 20m) is what’s getting all the headlines and it’s good to see BT acknowledge that the regulatory environment has been relatively benign. The company also virtue-signalled the potential creation of 7,000 jobs to enable this accelerated rollout.

Of course it’s Openreach that will actually have to lay the fibre. “We’re proud that BT Group is increasing its ambition for Openreach,” said Openreach CEO Clive Selley. “We’ve already proven that we can build ultrafast and ultra-reliable Full Fibre broadband to millions of homes and businesses at pace, and without compromising on quality.

“We’re also encouraged by the demand we’re seeing – having just connected our one millionth customer. Allied to our experience and innovation in scaling up the build, this gives us confidence that we can reach 25 million premises by December 2026 at world-class cost points.

“Research shows how Full Fibre can make us more productive, competitive and green as a nation, and it can enable a million people to return to the workforce, helping to level up the UK. So we believe the time is right to capitalise on that potential and, having made this technology available to 4.6m premises already, we expect to reach a peak build rate of four million premises a year.”

On top of all that fibre optimism, it was also announced today that the Premier League has extended its existing TV deal by another three years. While BT appears to be having a major rethink about its commitment to content, of which football rights is by far the major component, nothing concrete has been decided yet. Whatever it decides to do with BT sport, it’s now in a stronger bargaining position.

BT’s shares were down 6% at time of writing, apparently as a result of investors who were hoping BT would return more money to them via dividends instead of blowing it on fibre. But for those who are in it for the long term, there’s a fair bit to like in the announcements that accompanied this set of numbers.