BT Group (BT-A.L) - Company Research
Last Updated: 28 April 2026
BT Group plc (LSE: BT.A) is the FTSE 100 UK communications incumbent, structured as Consumer (EE, BT and Plusnet retail), Business (UK SME and Enterprise; International stub) and Openreach (the regulated wholesale fixed-line network). The thesis under CEO Allison Kirkby (in role since 1 February 2024) is a textbook "build now, harvest later" story: capex peaks around £5.0 bn in FY26 to deliver 25 m FTTP premises by end-2026 and 5G+ standalone to 99% of the UK by FY30; capex then drops >£1 bn by end-decade and normalised free cash flow steps up from a guided ~£1.5 bn in FY26 to ~£2.0 bn in FY27 and ~£3.0 bn by end-decade. The shareholder register has been reshaped: Bharti Enterprises took 24.5% from Patrick Drahi/Altice (completed November 2024), Deutsche Telekom holds 12.23% (legacy from the 2015 EE acquisition), and Carlos Slim’s Inbursa has built up to ~4%, leaving more than 40% of BT in the hands of foreign telco strategics. Five days ago (23 April 2026) BT signed an up-to-£200 m private 4G/5G + fibre deal with Northern Ireland Electricity Networks and announced a sovereign AI infrastructure partnership with Nscale, deploying up to 14 MW of NVIDIA-powered capacity across three BT data-centre sites — positioning BT as the first UK provider with a full sovereign-services suite. FY26 preliminary results are scheduled for late May 2026; the share price closed at ~223p on 24 April 2026, near a 52-week high. This report covers FY25 numbers, H1 FY26 progress, the FTTP and 5G build, the foreign-telco shareholder structure, and the principal risks: Ofcom’s 2026 Telecoms Access Review, the £3.9 bn IAS 19 pension deficit, altnet competition (CityFibre/Sky), and a leadership change at Openreach (Katie Milligan replaced Clive Selley on 1 April 2026).
1. Company Snapshot
| Company | BT Group plc |
| Ticker | LSE: BT.A (FTSE 100); ADR: BTGOF |
| Sector / Industry | Telecommunications — UK fixed & mobile incumbent |
| HQ | One Braham, Whitechapel, London E1 8EE |
| CEO | Allison Kirkby (since 1 February 2024; first female CEO) |
| CFO | Simon Lowth (retiring summer 2026); Patricia Cobian (ex-Virgin Media O2 CFO) succeeds |
| Chair | Adam Crozier (since December 2021; chair-designate of Experian from May 2026, retains BT chair) |
| Openreach CEO | Katie Milligan (from 1 April 2026; succeeded Clive Selley) |
| Founded | 1846 (Electric Telegraph Company); BT Group plc 2001 |
| Employees | ~111,000 (H1 FY26, -6% YoY); long-term plan 75–90k by FY28–30 |
| Fiscal year end | 31 March |
| Share price (24 Apr 2026) | ~223p (near 52-wk high; +20% YTD 2026) |
| 52-week range | ~159.85p – 225.10p |
| Market cap | ~£20–22 bn (~9.9 bn shares) |
| FY2025 revenue | £20,371 m (-2%) |
| FY2025 adj EBITDA | £8,209 m (+1%) |
| FY2025 normalised FCF | £1,594 m |
| Net debt + leases (Sept 2025) | £20.9 bn (incl. leases) |
| IAS 19 pension deficit (Sept 2025) | £3.9 bn |
| FY25 dividend | 8.16p (interim 2.4p + final 5.76p); H1 FY26 interim 2.45p (+2%) |
| Next results | FY26 prelims — late May 2026 (per BT financial calendar) |
2. Bull Case vs Bear Case
| Bull Case | Bear Case |
|---|---|
| FY27 normalised FCF target ~£2.0 bn (FY26 guide: ~£1.5 bn); ~£3 bn by end-decade as capex rolls off post the FTTP build — the post-build cash unlock thesis. | FY25 group revenue -2% to £20.4 bn; H1 FY26 revenue -3% to £9.8 bn — top line still shrinking. |
| Openreach FTTP take-up 38% (H1 FY26) and rising; broadband ARPU +4% to £16.7; record FTTP build pace (~2.2 m premises in H1 FY26 alone). | Openreach lost ~450k retail broadband connections in H2 FY25 and >1.3 m (~6%) over two years to altnets; CityFibre/Netomnia/nexfibre cover ~65% of UK homes. |
| £1.2 bn cumulative gross annualised cost savings since inception of programme; +£247 m added in H1 FY26. | Net debt up to £20.9 bn (Sep 2025) from £19.8 bn (Mar 2025); IAS 19 pension deficit £3.9 bn (gross) requires £600–800 m annual contributions through 2030. |
| 5G+ (standalone) ahead of plan: covers 44 m people / 66% of population (Nov 2025); 41 m target by spring 2026; 99% UK by FY30 — ~4 years ahead of UK peers. | UBS warned the £3 bn FY30 FCF target may be unachievable amid altnet pricing (CityFibre/Netomnia ~20–30% cheaper wholesale); CityFibre/Sky long-term wholesale deal a structural threat. |
| Strategic anchor shareholders: Bharti 24.5%, Deutsche Telekom 12.23%, Carlos Slim ~4% — supply patient capital and strategic alignment; Drahi/Altice fully exited (Nov 2024). | Concurrent leadership turnover: new CFO Cobian arrives summer 2026, new Openreach CEO Milligan from 1 April 2026, BT International CEO change — mid-cycle execution risk. |
3. What Does This Company Actually Do?
BT operates a vertically integrated UK telecoms group spanning the regulated wholesale access network (Openreach) and three retail-facing customer segments. Openreach typically contributes >70% of group EBITDA on a stand-alone basis; the combined retail businesses generate the majority of revenue.
FY2025 group revenue: £20.4 bn (-2%); adj EBITDA £8.21 bn (+1%).
| Segment | What it does | FY25 revenue | Approx. % of group |
|---|---|---|---|
| Openreach | Regulated wholesale fibre and copper access network — serves all major UK ISPs (BT, Sky, TalkTalk, Vodafone, etc.) | £6,150 m (+1%) | ~30% |
| Consumer (EE, BT, Plusnet) | Retail broadband, mobile, TV; postpaid mobile ARPU £19.3 H1 FY26 (-1.6%); broadband ARPU £41.9 (-1.4%) | ~£9 bn (-1%) | ~45% |
| Business (SME + Enterprise; UK-focused post International divestments) | Connectivity, networking, security, cloud & ICT services | ~£5 bn (-4%) | ~25% |
Note: Openreach’s economic significance is much larger than its revenue share suggests — it generates the majority of group adj EBITDA because its regulated cost-plus model produces structurally higher margins than retail.
4. The Business Model
- Openreach — regulated wholesale monopoly: Provides fibre and copper access lines to all major UK ISPs. Pricing is regulated by Ofcom under the Wholesale Local Access framework, with CPI-linked annual rises on key products. Returns are capped but predictable.
- FTTP build: 20.3 m premises passed at H1 FY26 (Sept 2025); ~22 m by April 2026; ~21.2 m mapped Jan 2026; on track to hit 25 m by end-2026 (build run-rate ~1.16 m per quarter); long-term goal 30 m by 2030.
- 5G: EE 5G+ (standalone) at 44 m people / 66% population (Nov 2025); 130 cities by end-2025; 99% UK target by FY30 (~4 years ahead of UK peers).
- Capex profile: FY24 £4.88 bn, FY25 £4.9 bn, FY26 guide ~£5.0 bn (peak), expected to drop >£1 bn by end-decade.
- AI / data centre: April 2026 deal with Nscale + NVIDIA for UK sovereign AI data-centre capacity (up to 14 MW across three BT sites); first UK provider with a full sovereign-services suite.
- Divestments: BT International divested in stages; UK-focused Business segment narrowing scope.
- Subsidies / regulatory credits: Not material to revenue / profit; Project Gigabit (UK government rural broadband) does fund some FTTP build but BT does not depend on subsidies for the bulk of the rollout.
5. Financial Health
Five-year financials (March year-end, £m):
| Metric | FY22 | FY23 | FY24 | FY25 | H1 FY26 |
|---|---|---|---|---|---|
| Revenue | ~20,850 | 20,681 | 20,797 | 20,371 | 9,810 |
| Adj EBITDA | ~7,600 | 7,929 | 8,115 | 8,209 | 4,109 |
| Capex | 5,286 | 5,056 | 4,880 | ~4,900 | ~2,400 |
| Norm FCF | n/a | 1,308 | 1,300 | 1,594 | ~400 |
| Net debt (incl leases) | ~18,900 | ~19,000 | ~19,500 | ~19,800 | ~20,900 |
| IAS 19 pension deficit | ~1,100 | ~4,800 | ~4,800 | ~4,100 | ~3,900 |
FY26 guidance: revenue ~£20 bn; adj EBITDA £8.2–8.3 bn; capex ~£5.0 bn; normalised FCF ~£1.5 bn.
Capital structure (Sept 2025): Net debt £20.9 bn (incl. leases) up from £19.8 bn YE25 on capex; IAS 19 pension deficit £3.9 bn (down from £4.1 bn YE25); cumulative cost savings £1.2 bn since programme inception.
6. Valuation & Market Data
| Share price (24 Apr 2026) | ~223p |
| Market cap | ~£20–22 bn (~9.9 bn shares) |
| 52-week range | ~159.85p – 225.10p |
| YTD performance 2026 | ~+20% |
| Trailing P/E | ~19× |
| Forward P/E | ~10× |
| EV (incl. debt + leases + IAS 19 pension deficit) | ~£45 bn |
| EV / FY25 adj EBITDA | ~5.5× |
| EV / FY27e norm FCF (~£2 bn target) | ~22× |
| EV / FY30e norm FCF (~£3 bn target) | ~15× |
| Dividend yield | ~3.7% |
| FY25 total dividend | 8.16p (interim 2.4p + final 5.76p) |
| H1 FY26 interim dividend | 2.45p (+2%) |
7. What Are They Building / What’s Coming?
- FTTP 25 m premises by end-2026 – on track at ~22 m by April 2026; long-term target 30 m by 2030.
- 5G+ standalone – 99% UK by FY30; 41 m people target spring 2026 (44 m at Nov 2025).
- Peak capex FY26 – ~£5.0 bn; falling >£1 bn by FY30.
- Norm FCF inflection – ~£1.5 bn FY26 (guidance) → ~£2.0 bn FY27 (target) → ~£3.0 bn end-decade. The basis of the post-2026 cash unlock thesis.
- Sovereign AI infrastructure – 23 April 2026 deal with Nscale + NVIDIA; up to 14 MW across three BT data-centre sites; positioning BT as first UK provider with full sovereign-services suite.
- Private 5G enterprise wins – 23 April 2026: up-to-£200 m deal with Northern Ireland Electricity Networks (private 4G/5G + fibre).
- Cost programme – £1.2 bn cumulative gross annualised cost savings; H1 FY26 added £247 m.
- Pension de-risking – IAS 19 deficit down to £3.9 bn (Sept 25) from £4.8 bn (Mar 23); £600–800 m annual contributions through 2030.
8. Competitive Landscape
UK fixed broadband market is ~28.9 m connections, with the top four ISPs holding ~85% of retail share. UK mobile market is post-consolidation following the Vodafone/Three merger (2024).
UK fixed broadband retail (approximate share):
| Provider | Subscribers / share | Notes |
|---|---|---|
| BT Group (BT, EE, Plusnet retail) | >8.8 m / ~30% | Subject company |
| Sky | ~5.8 m / ~20% | Comcast-owned; CityFibre wholesale deal a long-term threat to Openreach |
| Virgin Media O2 | ~5.74 m / ~20% | Cable + nexfibre altnet; H1 FY26 -26k subs |
| TalkTalk | ~3.6 m / ~12.5% | Lost 120k in Q3 2025 |
| Vodafone UK | gaining | +50k Q3 2025 broadband adds; merged with Three 2024 |
Wholesale & altnet: CityFibre, Netomnia and nexfibre cover ~65% of UK homes between them; CityFibre launched 5.5 Gbps symmetric service in June 2025 and signed a long-term wholesale deal with Sky — a structural threat to Openreach’s wholesale revenue if displacement accelerates.
Mobile: EE leads UK 5G coverage; Vodafone/Three combined have ~27 m subs post-merger; Virgin Media O2 second.
9. Leadership and Ownership
Top shareholders (April 2026):
| Holder | Stake | Notes |
|---|---|---|
| Bharti Enterprises (Sunil Mittal) | 24.5% | Bought from Altice Aug 2024, completed Nov 2024 (Patrick Drahi fully exited) |
| Deutsche Telekom | 12.23% | Legacy from 2015 EE acquisition; holds board seat |
| Carlos Slim (Inbursa) | ~3–4% | Initial 3% June 2024; scaled up |
| Other institutional | ~60% combined | BlackRock, Vanguard, Norges Bank etc. |
>40% of BT now in the hands of foreign telco strategics — a structurally unusual register for a UK Critical National Infrastructure plc.
Recent leadership changes:
| Date | Event |
|---|---|
| 1 February 2024 | Allison Kirkby starts as group CEO (succeeded Philip Jansen) |
| August–November 2024 | Bharti Enterprises completes 24.5% stake purchase from Altice |
| 1 April 2026 | Katie Milligan becomes Openreach CEO; Clive Selley moves to BT International (replacing Bas Burger) |
| April 2026 | Adam Crozier named chair-designate of Experian (May 2026 start); retains BT chair role |
| Summer 2026 (announced 2025) | Simon Lowth retires as group CFO; Patricia Cobian (ex-Virgin Media O2 CFO) takes over |
10. Risks and Challenges
- Ofcom 2026 Telecoms Access Review: Could squeeze Openreach pricing power; pension deficit’s inclusion in the WACC calculation is being contested.
- Pension liability: £3.9 bn IAS 19 deficit (gross); scheduled £600–800 m annual contributions through 2030 dilute headline FCF.
- Altnet competition: ~1.3 m broadband line losses in last 24 months; CityFibre/Sky deal could accelerate displacement.
- Capex burden / debt: £20.9 bn net debt rising; IAS 19 + leases pushes total obligations to ~£25 bn.
- Geopolitical / shareholder structure: Bharti (Indian) and DT (German) combined ~37%; National Security & Investment Act sensitivity; Critical National Infrastructure status.
- Execution / leadership: Three concurrent leadership changes (group CFO summer 2026, Openreach CEO April 2026, BT International leadership change).
- Capital allocation: Dividend has been held flat at the post-2020-reset level; investors looking for the FY26/27 results to clarify post-build distributions.
- Subsidy / regulatory: Project Gigabit and rural-build dynamics; Ofcom interventions (e.g., business connectivity remedies) could reset margins.
- Fixed line decline: Voice revenue continuing to decay; offset by FTTP take-up but the absolute revenue base shrinks.
11. Recent Developments
- 23 April 2026: BT/Nscale/NVIDIA deal for sovereign AI data-centre capacity (up to 14 MW across three BT sites); BT becomes first UK provider with full sovereign-services suite.
- 23 April 2026: Up-to-£200 m deal with Northern Ireland Electricity Networks (private 4G/5G + fibre).
- 21 April 2026: Adam Crozier named Experian chair-designate (effective May 2026); retains BT chair.
- 1 April 2026: Katie Milligan becomes Openreach CEO; Clive Selley moves to BT International.
- 5 February 2026 — Q3 FY26 trading update: Nine-month revenue ~£15 bn (-3%); Q3 revenue -4% to ~£5 bn; FY26 guidance reiterated.
- 10 February 2026: Milligan / Selley succession announced.
- 6 November 2025 — H1 FY26 results: Revenue £9.81 bn (-3%); adj EBITDA £4.1 bn (flat); interim dividend 2.45p (+2%); FCF £0.4 bn; net debt £20.9 bn; FTTP build 2.2 m H1 (record).
- 22 May 2025 — FY25 results: Revenue £20.4 bn (-2%); adj EBITDA £8.21 bn (+1%); final dividend 5.76p; cost savings £913 m.
- Drahi/Altice fully exited: Sold 24.5% to Bharti, completed November 2024.
- Ongoing: Ofcom 2026 Telecoms Access Review preconsultation submissions; BT has submitted its position.
12. Key Dates Coming Up
| Date | Event |
|---|---|
| Late May 2026 (per BT financial calendar) | FY26 preliminary results |
| July 2026 (TBC) | 2026 AGM (FY25 AGM was 10 July 2025) |
| Late July 2026 | Q1 FY27 trading update |
| November 2026 | H1 FY27 results — first window for the 25 m FTTP milestone |
| Summer 2026 | Patricia Cobian (CFO) joins; Simon Lowth retires |
| February 2027 | Q3 FY27 trading update; ex-div for FY27 interim |
| End-2026 / early-2027 | FTTP 25 m premises milestone expected |
| FY27 | Normalised FCF ~£2.0 bn target |
| End-decade | Normalised FCF ~£3.0 bn target; capex down >£1 bn from FY26 peak |
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13. Thesis Verdict
The central thesis. BT is a vertically integrated UK telecoms group built around Openreach, the regulated wholesale fibre and copper network that generates over 70% of group adj EBITDA, alongside Consumer (EE, BT, Plusnet) and Business retail arms. FY25 revenue was £20.4bn (-2%) with adj EBITDA of £8.21bn (+1%). The structural driver is the FTTP build (20.3m premises passed at H1 FY26, targeting 25m by end-2026 and 30m by 2030) and 5G+ standalone (66% UK population covered Nov 2025). The nearest catalyst is the post-build cash unlock: capex peaks at ~£5.0bn in FY26 then falls over £1bn by FY30, with normalised FCF guided to step from ~£1.5bn (FY26) to ~£2.0bn (FY27) and ~£3.0bn end-decade.
What would confirm or break it. Confirmation would come from FTTP take-up rising from 38%, capex declining post-FY26, FCF tracking toward the £2.0bn FY27 marker, and continued pension deficit reduction from £3.9bn. Materialisation of adverse Ofcom 2026 Access Review outcomes, accelerated altnet displacement following the CityFibre/Sky deal (after ~1.3m line losses in 24 months), execution slippage during the concurrent CFO/Openreach/International leadership transitions, or net debt rising materially above £20.9bn would invalidate the cash unlock trajectory.
Watchpoints
- ConfirmsSubsequent earnings and filings reinforcing the figures presented in this report.
- ConfirmsSubsequent earnings and filings reinforcing the figures presented in this report.
- InvalidatesAny disclosure that directly contradicts a material claim in the bull case.
Diagnostic grid
Generated by ChartsView research tooling. Thesis strength measures how well the evidence in this report supports the company's stated thesis — it is NOT a buy/sell rating or price target. ChartsView is not authorised by the FCA to provide regulated investment advice. Generated 28 Apr 2026.