BT braces for loss of 800,000 customers as it banks on fibre to keep turnaround ‘on track’
BT stuck to its cash targets despite another quarter of flat sales and falling profit, as the telecoms giant pointed to growing demand for its fibre network.
The FTSE 100 firm for around £2bn of free cash flow this year after revenue edged little changed to £4.3bn in the first quarter. Pre-tax profit slipped four per cent to £505m.
The results come as chief executive Allison Kirkby looks to convince investors that years of heavy spending on BT’s fibre network will deliver stronger cash generation.
Kirkby said: “We remain on track to deliver our targets, including cash flow of £2bn this year and £3bn by the end of the decade.”
BT said full-fibre broadband generated more than half of broadband revenue for the first time after Openreach added a record 574,000 new fibre customers during the quarter.
It now serves 9.4 million premises and remains on course to reach 25 million by the end of the year.
Competition bites
BT continues to face growing competition from alternative broadband providers as it replaces its legacy copper network with full fibre.
The company still expects to lose around 800,000 broadband lines this year, even as take-up of its fibre network continues to grow.
The update follows BT’s deal last month to combine its international business with Verizon in a joint venture, sharpening its focus on the UK market.
It also comes days after an undisclosed shareholder sold a roughly one per cent stake in the group through a £167m placing.
Kirkby said BT had made “a solid start to the year”, pointing to record fibre take-up and growth in its consumer customer base.
BT shares were down as much as 2.2 per cent to 191p in early trading on Thursday.