BT Group: Q1: Early Signs of Pressure Easing as Altnet Build Slows

Research evidence excerpt

BT Group: Q1: Early Signs of Pressure Easing as Altnet Build Slows

appetite for consolidation. Vodafone will

report on Monday, and we note recent reports (Financial Times) that the operator may have

an interest in TalkTalk’s consumer unit (unconfirmed by Vodafone). A sale to Vodafone,

which lacks fixed access infrastructure, would not necessarily impact Openreach’s wholesale

revenues.

Consumer trends: Q1 Consumer service revenues were broadly flat y/y at £1,958m,

supported by continued customer growth, while lower voice revenues weighed on

performance. Total revenues were broadly flat y/y at £2,331m. Mobile remained positive,

with 13k postpaid net adds (Q4: +8k; Q3: +35k) and churn remaining stable y/y at 1%;

postpaid ARPU of £19.7 was up 2% y/y. Broadband net adds remained positive, with +1k

subscriber additions (Q4: +6k; Q3: +8k) in the period, despite competition as BT’s fibre-first

strategy continues to positively deliver. Broadband ARPU of £40.9 declined 2% y/y, largely

attributed to voice declines. Fibre momentum improved, adding 0.3m connections

sequentially to the FTTP base. The competitive retail environment remains challenged by

altnet switching and aggressive entry-level pricing, although slowing altnet build activity and

increasing focus on penetration over expansion continue to improve market dynamics. BT’s

converged homes (FY26: 26.6%; FY25 24.6%) continue to provide an additional structural

buffer against churn.

Openreach: Line losses continue to modestly improve, full-year targets unchanged. Q1

Openreach revenues grew 1% y/y to £1,575m (, supported by continued FTTP expansion and

broadband ARPU growth, with broadband ARPU increasing 7% y/y to £17.7 driven by

higher FTTP take-up, improved speed mix and price increases. Q1 adjusted EBITDA grew