Long-suffering BT shareholders faced yet another blow on Thursday after the telecoms group said they now saw lower revenue for the full year.
BT shares were down 3% at the time of writing despite the company affirming EBITDA outlook for the period.
“BT shareholders enjoying a near 50% recovery in the share price this year from its lows may have had the wind taken out of their sails this morning reading this update. The company has warned that revenue will be lower than previously indicated partly due to tough market conditions,” said Adam Vettese, market analyst at investment platform eToro.
“The broadband market is extremely competitive and saturated with choice for consumers and BT has lost out as a result.”
Higher competition was a central component in lower revenues over the most recent half-year period that ultimately cut profit before tax by 10% to £1bn.
The rollout of fibre continues apace but investors will be frustrated the huge number of people now using the service isn’t translting into improved financial performance for BT.
“Openreach is BT’s key asset, and as the fibre rollout gathers pace, it’s benefitting from higher prices and a more favourable mix of fibre vs. older technology,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“But new entrants are pricing aggressively, and there’s a weaker overall market for broadband and new homes, leading to 377,000 line losses over the first half. While the fibre build continues, BT’s most pressing challenge at Openreach is limiting these line losses.
“BT finds itself in a period where investors can see an end to the massive investment in fibre buildout, which should bring a material improvement in areas like cash flow, but the current market remains a challenge.”