- CEO Patterson: Ofcom recommendations are ‘broadly sensible’
- Shares advance as revenue of £5.78 billion beats estimates
BT Group Plc reported a 35 percent sales jump after the acquisition of wireless carrier EE, and cited strong demand for the broadband network it’s negotiating to maintain control of with British regulators.
Adjusted revenue advanced to 5.78 billion pounds ($7.61 billion) in the three months ended June 30, the London-based company said in a statement Thursday. That compares with the 5.71 billion-pound average of three estimates compiled by Bloomberg. Adjusted earnings before interest, taxes, depreciation and amortization rose 25 percent to 1.82 billion pounds.
BT rose 3.4 percent to 415.8 pence at 8:30 a.m. in London, the biggest gain in the Stoxx 600 telecom index. The stock is down 12 percent so far this year.
The results come just days after the U.K.’s telecommunications regulator said BT, the former British phone monopoly, could maintain control of its fixed network if it grants rivals greater access. Competitors such as TalkTalk Telecom Group Plc, which rely on BT’s network, want its Openreach unit to increase investments in fiber-optic connections to customers’ homes.
The plan put forth by the regulator, Ofcom, would require BT to provide its competitors with greater access to the network. BT Chief Executive Officer Gavin Patterson, speaking on Bloomberg Television on Thursday, called the Ofcom proposal “broadly a sensible set of recommendations,” while cautioning there were issues that still need to be resolved.
Competitors say Ofcom didn’t go far enough, and that any deal with BT will have to be monitored closely.
“Ofcom’s proposals are a small step when actually what the U.K. needed was a big step,” Sky Chief Financial Officer Andrew Griffith said in a Bloomberg Television interview.
BT and other EU telecom providers are branching out into new areas and pressing competition with broadcasters like Sky while trying to maintain a hold on their core businesses. BT’s acquisition of mobile operator EE put it into direct conflict with wireless giant Vodafone Group Plc. The company last year took on Sky by increasing its investment in Premier League soccer television rights.