BT Group PLC (LSE:BT.A) remained in the spotlight as analysts reflected on the announcement yesterday by Openreach of a new pricing structure for its fibre-to-the-premises (FTTP) product (Equinox 2).
Barclays said the news was largely as expected but does have material implications for the UK broadband market.
Overall the bank said it believed the measures are designed to incentivise communications providers to migrate all their existing in-footprint customers to FTTP as quickly as possible, as there are no restrictive covenants.
In terms of implications for BT forecasts, the broker expects lower average revenue per user for fiscal year 2024, but suggested this could be more than offset by higher connection volumes.
Barclays also noted that company consensus forecasts do not appear to reflect the full CPI inflation link.
The next step is for Ofcom to analyse the pricing, it pointed out, adding “We expect a modest positive reaction to BT shares.”
Barclays has an overweight rating on BT.