BT Profit Falls as Lower Broadband, Voice Margins Offset Cuts

BT Group Plc reported a slight decline in profits for its fiscal first quarter, as lower margins in its consumer broadband and voice businesses offset its cost-cutting efforts.

Adjusted earnings before interest, taxes, depreciation and amortization fell 1% year over year to £2 billion ($2.7 billion) in the first quarter, according to a statement Thursday. Analysts had estimated about £2 billion, according to a consensus provided by the company.

The company made a “solid start to the year,” Chief Executive Officer Allison Kirkby said in the statement.

Kirkby, who took the top job at BT in 2024, has been cutting costs and refocusing the company on its core UK market as a years-long, intensive fiber buildout by its Openreach division nears completion.

BT’s fixed network lost about 192,000 customers during the quarter, and the company expects 800,000 losses for the year.

BT last month agreed to create a joint venture for its business-focused international unit with US operator Verizon Communications Inc., and will report the division under discontinued operations until the deal completes.

Read more: Verizon, BT Merge International Units in Home Markets Pivot (1)

BT’s shares are up about 6% so far this year, and closed at 195.80 pence on Wednesday.

The company, which offers mobile and home broadband as well as operating the Openreach wholesale network, is facing growing competition from a range of players. Low-cost virtual mobile network operators, satellite providers such as SpaceX’s Starlink and consumer brands such as Tesco Mobile and Schwarz Group’s Lidl are all offering mobile calling and data services. That’s forcing incumbents to refocus on branding, price and customer loyalty.

Openreach announced new discounts to fend off competition from the UK’s panoply of alternative broadband providers, known as “alt nets.” BT also revived its BT Mobile consumer brand to sell mobile services to its broadband customers and sponsor the Euro 2028 football tournament.