BT Group PLC (LSE:BT.A) is facing increasing headwinds according to analysts at Deutsche Bank (NYSE:DB), which has reiterated its sell rating but cut its target price to 125p.
Since news of Patrick Drahi acquiring a 12% voting stake, BT shares have since fallen from 200p to 140p, which the broker side was its previous target.
Deutsche Bank (NYSE:DB)’s concern is infrastructure competition, which could see Openreach broadband lines fall by 4-6mln in a base to worse-case overbuild scenario.
Earlier today, Virgin-O2 launched Volt, a broadband package with Virgin Media (NASDAQ:VMED) and a pay monthly contract with O2 that doubles a customer’s fixed-line speeds and mobile data allowances.
Including the risk to retail (B2B and B2C), Deutsche Bank estimates that alt-network build (from Virgin Media (NASDAQ:VMED) O2) could take Group EBITDA down by GBP1-1.6bn, offsetting any boost when BT’s 25m fibre project comes to an end by Dec 2026.
Deutsche had estimated that the alt-nets were planning to build to 22m premises by 2025 but thinks that might prove conservative.
Shares in BT fell to 137.65p.
