News
Hitting its target of 15 million homes by mid-2020s could cost UK incumbent an extra £400-£600 million per year
BT has warned that it may have to reduce its dividend to help it cover the cost of its fibre-to-the-home (FTTH) deployment.
According to a Financial Times report, BT chairman Jan du Plessis made the disclosure at the company’s AGM. He explained that while the UK incumbent is confident of maintaining this year’s final dividend – which stands at 10.78 pence per share, payable in September – that might not be the case a "year or two in the future."
Reason being, BT in May raised its full fibre rollout target from 3 million premises to 4 million premises by March 2021. It has also pledged to deliver FTTH to 15 million premises by the middle of the next decade.
BT CEO Philip Jansen, who took up the reins this year, said that hitting that 15 million target is likely to require an extra £400 million-£600 million of capex per year.
Money is therefore likely to be tight at BT for the foreseeable future. Particularly given the company is already in the midst of a £1.5 billion cost-cutting plan that includes shedding 13,000 jobs over three years, closing hundreds of offices, and selling its London headquarters.
It is possible the purse strings at BT could get even tighter too.
Indeed, the FT reported that Du Plessis told attendees at the AGM that as well as reducing the dividend, BT is also considering further cost cuts, more borrowing, and reducing capex in some areas in order to pay for its fibre deployment.
