LONDON: BT Group Plc, the U.K.’s former telecommunications monopoly, reported fourth-quarter profit that beat analysts’ estimates, bolstered by the acquisition of mobile operator EE.
The company also announced plans to invest £6 billion (Dh32.3 billion, $8.7 billion) in upgrades to its network, saying it would bring ultrafast broadband and 4G mobile connections to more than 95 per cent of the country by 2020. The company said it aimed to reach 2 million homes and offices directly with “fibre to the premises” connections.
The move follows demands from some rivals for a separation of BT’s broadband network from the rest of the company. BT weathered a recent review by UK regulators without having to make major concessions. The investment plan is conditional on having certainty from regulators, Finance Director Tony Chanmugam said in an interview with Bloomberg Television.
“We need to have the regulatory infrastructure to allow us to do that,” Chanmugam said. “Unless we’ve got a degree of certainty, we cannot spend that money. I can’t look shareholders in the eye.”
BT rose 3.1 per cent to 453.2 pence at 8:15am in London. The shares have declined 3.9 per cent this year.
In the quarter ended March 31, earnings before interest, taxes, depreciation and amortisation rose 14 per cent to £2.08 billion, London-based BT said in a statement on Thursday. That compares with an average estimate of £1.93 billion. Sales rose 22 per cent to £5.66 billion, compared with an average estimate of £5.67 billion. The period includes two months of results from EE, the U.K.’s largest mobile network, which BT acquired at the end of January.
The European Commission is expected to block a combination of two of EE’s rivals — CK Hutchison Holdings Ltd’ s Three UK unit and Telefonica SA’s O2 — people familiar with the situation have said. That would lessen the competitive threat to BT’s position in the UK mobile market, analysts say.
The acquisition rounded out BT’s consumer business, which also includes fixed-line service, broadband and a growing portfolio of entertainment. The company has been trying to enhance its bundled offerings in order to fend off a challenge from pay-TV provider Sky Plc, which has been adding telephone services.
In the latest quarter, BT’s wholesale broadband unit, Openreach, added 415,000 fibre optic connections, including upgrades.
