BT share price: Analysts flag benefits after Ofcom’s latest update

Analysts expect BT Group (LON:BT.A) to benefit from Ofcom’s intention to make sure telecoms regulation supports investment in the UK’s fibre infrastructure, Proactive Investors has reported. The comments come as the former telecoms monopoly remains under regulatory pressure to improve the performance of its network division Openreach.

BT’s share price has advanced in London in today’s session, having added 0.31 percent to 283.09p as of 12:34 BST, outperforming the broader UK market, with the benchmark FTSE 100 index having slipped into the red and currently standing 0.70 percent lower at 7,328.17 points. The group’s shares have lost nearly a quarter of their value over the past year, and are down by some 22 percent in the year-to-date.

Macquarie reiterated its ‘overweight’ rating on BT today, with a price target of 355p on the shares, noting that the former telecoms monopoly remained its top pick among European large-cap operators. The move came after Ofcom provided an update yesterday in a meeting, saying that fibre to the premises (FTTP) was a 10-year investment in the UK that requires multiple operators.

“Given the limited current rollout we believe there is ample room for BT and third-party operators to roll out networks,” the analysts pointed out, as quoted by Proactive Investors. “In our view, Ofcom was very pragmatic and is keen to see an increase in FTTP builds, ensure the economics of third-party network investment are sustainable and improve customer service levels.”

The newswire also quoted Numis as commenting that the industry watchdog had displayed ‘muddled thinking’ on its plans to cut Openreach’s wholesale prices for FTTC. The broker believes this is bullish for BT at the current share price and repeated a ‘buy’ rating and target price of 390p.

Today’s upbeat comments come after BT recently teamed up with Dell EMC to look for new ways to manage network traffic.

As of 13:06 BST, Thursday, 14 September, BT Group plc share price is 283.28p.