BT Group PLC (LSE:BT.A) is heading into its third-quarter results with investor attention once again fixed on Openreach line losses, but analysts at Citi argue that the more important issue lies further downstream in the consumer business.
In a note ahead of the results on 5 February, Citi said Openreach broadband losses are likely to dominate headlines, as they have in recent quarters.
However, it cautioned that this focus risks obscuring a deeper problem. Around 51% of Openreach revenue comes from within the BT group itself, meaning its reported performance can be supported by volumes from BT’s own retail divisions, albeit potentially at the expense of their profitability.
That dynamic helps explain why Openreach has continued to deliver revenue growth and occasional positive surprises, despite an increasingly competitive broadband market.
The cost, Citi argues, has been borne by Consumer, where pricing pressure, retention offers and weaker mix have steadily eroded earnings expectations.
Over the past year, Consumer has accounted for £105 million of the £131 million downgrade to group EBITDA forecasts for 2026/27, according to Citi, with expectations for future growth also being pared back.
By contrast, Openreach has so far held up better than feared.
Citi reiterated its 'sell' rating on BT with a target price of £1.40, suggesting the market remains too focused on infrastructure metrics while underestimating the structural pressure on consumer telecoms returns.