By Investing.com — BT Group (LON:BT) shares fell over 5% on Thursday, following its Q2 results that posted ongoing weakness across key revenue-generating segments.
This decline was largely due to deteriorating performance within BT’s business unit and continued competitive pressures on broadband services, which weighed heavily on the group’s overall financials.
BT reported a 3.1% drop in revenue, falling to £5.086 billion— below analyst expectations of £5.217 billion.
While EBITDA saw a modest rise of 0.5%, cost-saving measures appeared to offset some of the revenue shortfalls.
The Business segment, however, posted a 6.8% drop in revenue compared to the previous quarter, mainly due to underperformance in non-UK assets and growing challenges in the corporate and public sectors.
“We are wary that competition in broadband will intensify (BT brand being retired in Consumer, introduction of One Touch Switching and low retail/wholesale pricing from altnets),” said analysts at UBS in a note.
UBS flagged several challenges facing BT’s core operations, including the gradual shift of clients like Sky and TalkTalk away from BT’s Openreach network—a trend that may further strain BT’s cash flow.
UBS analysts also mentioned the risk posed by alternative network providers who offer low retail and wholesale pricing, further eroding BT’s market share.
This negative forecast led UBS to adjust its revenue guidance downward, projecting a 1–2% contraction for BT, compared to its previous expectation of slight growth.
The broader context remains challenging for BT Group, with UBS projecting ongoing competition in broadband and warning of financial headwinds if major clients continue to seek out alternative providers.