DB Daily Fibre: Industry Update

Research evidence excerpt

DB Daily Fibre: Industry Update

Deutsche Bank

Research

Europe Industry Date

Belgium 29 June 2026

Spain DB Daily Fibre

United Kingdom Industry Update

Telecommunications

Wireless Services

BT INT JV / CLNX BBK / OBEL- LAST

MILE / TEF HQ / X-C

Robert Grindle, Ph.D.

KEY EVENTS THIS WEEK

Research Analyst

Monday - Digi Communications AGM +44-20-754-58490

BT (Sell, last close 195p): John Karidis

1) BT has announced a combination of its International business with that of Verizon

+44-20-754-54610

international enterprise in a deal which will create a 50-50 JV and see BT receive a

$625m equalisation payment (we valued BT international in our sum-of-parts at Keval Khiroya, CFA

£500m or - $670m). BT international will be de-consolidated (small FY27 guidance Research Analyst

reduction) and BT reiterates its Normalised FCF expectations for £2bn in FY27 with +44-20-754-18164

no change to dividend policy. Some modest value may be created by the JV to BT Roshan Ranjit, CFA

beyond the initial equalisation payment and it is good that mgt have taken steps to Research Analyst

cauterise a loss-making business (just £29m EBITDA, -50% yoy in 4Q 26) - Our view +44-20-754-52908

that BT remains unattractive vs peers due to a difficult domestic competitive Vijay Saravanan

environment is unchanged and investors should sell on any share price strength. Research Associate

2027 guidance update (ex international): normalised FCF unchanged (c.£2.0bn).

EBITDA guidance to £8.1 - 8.2bn (from £8.2 - 8.3bn) and capex £4.2 - 4.3bn (from Ankit Sharma

c.£4.3bn). 2027 UK service revenue unchanged and mid-term guidance Research Associate

unchanged.

2) ISPreview reports that BT has cut the price of its excess connection charges

(ECCs) in respect of broadband and Ethernet deployments when extra work to