RE: Times23 Jun 2020 22:52
The group owns EE, Britain’s largest mobile phone network, but its prize asset is Openreach. Mr Jansen hopes to pay for the fibre rollout from cashflows and will save about £2.5 billion by suspending the dividend. Some analysts are sceptical, fearing that he will have to find a co-investor or will need to raise money through a share sale.
What is beyond dispute is the long-term value of fibre networks, which are expensive to build but will throw off prodigious amounts of cash for years to come. The mood music from Whitehall should give Mr Jansen some comfort. The government has made universal fibre broadband a priority.
BT faces competition from a clutch of well-funded fibre players, but if Mr Jansen gets it right, Openreach will be the dominant provider of fibre broadband for years to come.
In May, this column advised potential investors to avoid BT as the journey to the future would be arduous and expensive. However, for those willing to weather a few years of turbulence, BT is worth a look.
ADVICE Buy