BT Group PLC (LSE:BT.A) has seemingly ditched plans to turn to private equity to help fund the build of its fast fibre to the premises network.
In a statement alongside its half-year results, Philip Jansen, chief executive, said it had held talks with potential investors but had now decided to go it alone.
“With fibre to the premise build costs coming down and take-up ahead of expectations, we have decided to retain 100% of the project for shareholders.”
Openreach, BT’s broadband network arm, is responsible for the FTTP roll-out and there had been talk of a joint venture to accelerate the project with rivals Virgin Media O2 and Cityfibre recently speeding up their build-out plans.
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Virgin Media (NASDAQ:VMED) O2 aims to upgrade its 15.5mln premises network by 2028 and is talking to broadband providers about moving onto its network as wholesale customers.
Jansen said the cost of upgrading its copper network had dropped faster than expected while take-up in areas where the service has higher than anticipated.
Openreach has now rolled out fast fibre to six million premises, he said, with the group on track target to have 25 mln premises covered by 2026.
Once it gets past the peak of the build-out, Jansen added it expected to generate an additional £1bn a year in cash and save £500mln annually in operational costs before any additional revenues that might arise.
By the end of the decade this will equate to £1.5bn in additional cash flow compared to this current year, said BT.
The telco recently appointed Robey Warshaw, an advisory firm, to help it in the event it faces a bid from Altice, French tech billionaire Patrick Drahi’s vehicle that bought a 12% stake in June.
Altice is free to make an offer from early December and those cashflow projections presumably won’t have gone unnoticed.
Shares in BT rose 6.6% to 151.6p.