BT Group has announced that it will scrap its shareholder dividend for the next two years, as it concentrates on recovering from the economic impact of the Covid 19 pandemic, while simultaneously investing in 20 million fibre to the home (FTTH) connections to homes and businesses across the country by the late 2020s.
The company will not pay dividends in 2020 or 2021 but expects to reintroduce the dividend by 2022 at a price of £0.077 per share.
"Covid-19 has changed everybody’s world and I am immensely proud of how BT has responded to the challenges the Covid-19 crisis has presented. Our strong and resilient networks, both fixed and mobile, have proved critical to the continuing functioning of the UK economy, providing unrivalled connectivity and services for the nation.
"Of course, Covid-19 is affecting our business, but the full impact will only become clearer as the economic consequences unfold over the next 12 months. Due to Covid-19, BT is not providing guidance for 2020/21, at this time,” said the company’s CEO, Philip Jansen, in a statement to the press.
The news comes on the same day that BT’s rivals O2 and Virgin Media announced a £31 billion plan to merge their operations in the UK – creating a single entity with the scope and scale to challenge BT on both the fixed line and mobile front.
"BT has the best network infrastructure in the UK. We have the leading 4G network and are rapidly expanding our leadership position in 5G, that today covers over 80 towns and cities. We have the largest and most extensive fixed network and are leading the UK on the next generation Fibre-to-the-Premises (FTTP) network where we now pass 2.6 million premises. Today we are announcing a rapid acceleration of our FTTP build with a target of 20 million premises passed by the mid- to late-2020s, including a significant build in rural areas. After passing 1.3 million premises last year, we are aiming at over 2 million in 2020/21, and envisage a maximum build rate of 3 million premises per year. Our FTTP investment should deliver pre-tax nominal returns of between 10 per cent to 12 per cent and is based on a regulatory framework consistent with Ofcom’s preferred policy direction and continued support for infrastructure investment and competition,” Jansen said.