Investors wait to see cost-of-living impact on BT customers

Analysts in the City will be waiting nervously to see whether the cost-of-living crisis has seen an exodus in subscribers from telecoms giant BT when the company reveals its results on Thursday.

US streaming rival Netflix said recently its own subscriber base had suffered as households cut back and investors in BT are hoping similar trends are not being seen more broadly.

Bosses are expected to tell the City revenues dropped in the past year as it faces rising costs which have already been passed onto customers.

Analysts predict the company’s total group revenue dropped by 2.3% to £20.9 billion in the year to March 2022, with the full-year results published on Thursday.

BT say they have had to make tough pricing decisions this year as the cost of investing in its networks shot up due to increased demand for mobile data and in response to soaring inflation rates.

The network provider says it raises prices in line with the consumer price index (CPI) plus 3.9%, meaning customers could face bill increases of up to 11% following the latest CPI inflation reading of 7%.

The company, which owns mobile provider EE, said data usage by customers has risen rapidly which means it’s had to spend more on its networks to handle the increased demand.

However, financially vulnerable customers on its social tariff and basic packages are promised price freezes.

The business has been in the public eye in recent months due to takeover speculation in part fuelled by an 18% stake acquired by French telecoms magnate Patrick Drahi in December.

It also announced it is in talks with Eurosport owner Discovery in February to create a joint venture that would prop up its BT Sport division.

Investors will be looking out for any updates on the 50-50 venture talks and if the company will address bid speculations surrounding Mr Drahi’s increased stake.

BT said Mr Drahi had no intention of making an offer in a six-month no-bid clause that expires on 14 June, although he is entitled to increase his stake in the company during that time.

But analysts question the likelihood of the Government allowing a takeover of the telecoms giant in light of a growing number of UK companies sold to private equity firms and overseas investors.

Shareholders will also be looking to see how BT’s 5G fibre rollout to millions of homes has affected its balance sheets.

BT-owned Openreach said it has connected more than seven million homes to its full-fibre network in April and is adding 50,000 households every week.

The company said it plans to cover 25 million homes and businesses with its 5G services by 2026.