Sunday, December 5, 2021

BT suggests it could cut dividend to fund fibre expansion

BT has suggested it could cut the dividend handed out to shareholders in order to invest in fibre to the premise (FTTP) infrastructure.

Speculation that BT is preparing to cut its dividend for the first time since 2009 has been mounting, with some expecting an announcement in the company’s most recent financial results.

However, such a move did not materialise, with CEO Philip Jansen doubling down on a promise to change the payment until the end of the current financial year.

BT dividend

It is thought that some investors would be prepared to accept a cut if BT could prove the potential for long term gains. Others believe that investment in ‘full fibre’ infrastructure is essential given recent rollouts from rivals like Virgin Media and the emergence of ‘altnet’ providers like CityFibre.

BT has increased its fibre to the premise (FTTP) rollout target to four million by 2021 and 15 million by the mid-2020s – if it there is a suitable investment and regulatory climate. Nationwide coverage could be achieved by 2023.

At the company’s Annual General Meeting in London, Chairman Jan du Plessis reportedly said that BT would consider reducing the dividend, alongside other cost savings and borrowing, in order to fund the expansion. This could happen within the next two years.

Jansen is overseeing the implementation of a restructuring plan introduced by former CEO Gavin Patterson that will see 13,000 jobs but and operations de-centralised to 30 sites around the UK. As part of the restructure, BT will vacate its London St Paul’s headquarters.

ALSO READ  Belagavi murder: Interfaith love at risk amid India’s Hindu nationalist surge

It is hoped the changes will save £1.3 billion, allow the more streamlined company to react more rapidly to market trends, and means it can get closer to customers.

In a bid to drive employee engagement and boost morale, BT is to award shares worth £50 million to staff every year.

Via The Times


Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.