BT share price: Deutsche Bank concerned over telco’s broadband roll-out plan

Deutsche Bank analysts have named BT Group’s (LON:BT.A) plan to upgrade the UK’s broadband infrastructure as their biggest concern, Proactive Investors reports. The comments come with the telco’s network division Openreach looking to replace the country’s ageing copper broadband lines with superfast fibre.

BT’s share price has been steady in London in today’s session, having inched 0.11 percent higher to 238.25p as of 14:47 GMT. The shares are outperforming the broader market, with the benchmark FTSE 100 index having fallen into negative territory and currently standing 0.47 percent lower at 6,869.18 points.

Broadband plan concerns

Deutsche Bank reiterated its ‘hold’ rating on BT Group today, with a price target of 235p on the shares. Proactive Investors quoted the analysts as saying that their main worry was how the telco’s new chief executive Philip Jansen grasps the fibre to the premises (FTTP) programme, given the costs involved and the competition it faces from rivals doing the same thing.

“On one hand dividends and pension constrain investment budgets, on the other, competitors are starting to receive funds for ambitious new builds and are mobilising to avail of duct and pole access regulation,” the broker pointed out.

Analysts upbeat on strategy

Deutsche Bank, however, sounded an upbeat note on BT’s strategy, arguing that the telco’s steps to lower its high-cost base by closing its final salary pension scheme, cutting jobs and deciding to move out of its central London headquarters in St Paul’s presented a “silver lining of sorts from recent turmoil”.

The comments came after Barclays reaffirmed the telco as an ‘equal weight’ this week, arguing that its newly formed enterprise division is facing top-line pressures which are unlikely to abate any time soon.

As of 15:13 GMT, Wednesday, 23 January, BT Group plc share price is 238.25p.