BT Group Reports Strong Q1 2026 with Record Fibre Connections and Strategic Verizon JV

Unprecedented Full Fibre Expansion and Network Infrastructure Progress

During Q1, BT expanded its FTTP footprint to 23.4 million premises, adding 514,000 premises in three months. The company remains on target to reach 25 million FTTP-enabled premises by December 2026, marking a pivotal infrastructure achievement for the UK telecom sector.

Openreach’s FTTP services saw record demand with 574,000 net new connections, reaching 9.4 million total premises connected. The 40% take-up rate across the fibre footprint underscores strong consumer and business demand for next-gen broadband. Openreach broadband average revenue per user (ARPU) rose 7% to a317.7, driven by increased FTTP adoption, improved speed mix, and pricing adjustments. The retail FTTP base grew to 4.8 million premises year-on-year, including 4.5 million Consumer connections (54% of total broadband base) and 0.3 million Business connections, reflecting diverse customer engagement across sectors.

Fibre Broadband Surpasses Half of BT’s Broadband Revenue

For the first time, fibre broadband contributes over 50% of BT Group’s total broadband revenues, marking a key milestone in transitioning from legacy copper networks to fibre infrastructure. This shift aligns with evolving customer profiles and usage, with BT investing across consumer brands to expand its customer base and service uptake.

Consumer division growth included 1,000 new broadband connections, 13,000 postpaid mobile additions, and 9,000 new television customers, indicating sustained momentum in bundled offerings. Broadband and postpaid mobile churn remained stable at 1.1% and 1.0% respectively despite UK market competition. The convergence strategy—measuring households with both BT fixed broadband and postpaid mobile—increased to 26.8% from 26.6% last quarter and 25.5% a year ago, reflecting rising integrated service adoption.

EE Mobile Network Maintains Leadership with 5G Plus Coverage Expanding to 77%

EE retained its market leadership, earning P3’s Test Champion Award and top rankings in Reliability, Coverage, and Performance. EE’s 5G Plus coverage grew to 77% of the UK population, up from 73% last quarter, showcasing accelerated next-gen mobile infrastructure deployment. Consumer postpaid mobile ARPU increased 2% year-on-year to a319.7, supported by pricing strategies and service mix optimization.

The EE One Up rewards programme launched this quarter aims to boost customer engagement and retention amid competitive pressures. Consumer broadband ARPU declined 2% year-on-year to a340.9, mainly due to voice service reductions as customers shift from legacy landlines. BT notes this final legacy landline year as transitional, with non-voice service revenue growing despite voice-line declines.

Business Division Stabilises with Key Connectivity Contract Wins

BT’s Business division saw service revenue stabilisation, driven by strong sales order growth and major new contracts with Scottish Water and Royal Mail. Adjusted EBITDA declined 7% year-on-year to a3302 million, as broadband and Corporate/Public Sector growth partially offset margin pressure from voice decline and market competition.

Business service revenue stabilisation follows prior headwinds, with contract wins signaling demand for critical connectivity in UK public sector and utilities. Business broadband net additions reached 1,000 in Q1. Adjusted Business revenue remained flat at a31,293 million versus a31,287 million prior year, reflecting transition from legacy services to higher-value connectivity and corporate solutions.

Cost Transformation Drives Operational Efficiency Across BT Group

BT’s cost transformation initiatives delivered operational improvements, including an 8% year-on-year reduction in network energy usage, an 8% cut in labour resources to 94,000 employees (excluding International), and a 21% decline in Openreach repair volumes. These efficiencies partly offset margin pressures from broadband and voice revenue declines, with adjusted EBITDA down only 1% year-on-year to a32.0 billion continuing operations.

The group’s Net Promoter Score (NPS) rose 3.6 points year-on-year to 30.7, excluding International division, indicating improved customer satisfaction amid competitive challenges and legacy voice phase-out. Cost savings are being reinvested into network expansion and customer service enhancements rather than solely margin improvement. Openreach’s 21% repair volume reduction signals better network reliability and lower maintenance as fibre rollout expands and copper reliance diminishes.

Strategic Verizon Joint Venture and International Division Restructuring

BT announced a landmark joint venture with Verizon Communications, merging BT’s International division with Verizon’s operations to form a large-scale global connectivity business. This aligns with BT’s UK-focused transformation strategy, allowing concentration of capital and management on domestic market growth and digital infrastructure. The deal is expected to close in H2 2027, pending regulatory and customary approvals.

Following the June announcement, BT’s International customer-facing unit is classified as discontinued operation. Q1 International adjusted revenue was a3451 million versus a3542 million prior year; adjusted EBITDA was a329 million versus a321 million. All comparative financials have been restated to reflect continuing operations excluding International, simplifying reporting and enabling clearer assessment of BT’s ongoing UK performance separate from the joint venture.

Financial Guidance Reaffirmed with Medium-Term Outlook Maintained

BT reaffirmed FY27 and multi-year guidance updated in June, reflecting continuing operations and the International JV classification. Normalised free cash flow guidance for FY27 remains approximately a32.0 billion continuing operations, with medium-term guidance near a33.0 billion by decade-end. Adjusted group revenue guidance for FY27 was revised to a317.1 billion–a317.6 billion (down from a319.0 billion–a319.5 billion including International), while UK service revenue guidance remains a315.1 billion–a315.4 billion with expected sustained growth.

Adjusted EBITDA guidance for FY27 was updated to a38.1 billion–a38.2 billion continuing operations (previously a38.2 billion–a38.3 billion including International), with sustained growth anticipated ahead of UK service revenue growth, supported by ongoing cost transformation. Capital expenditure excluding spectrum was revised down to a34.2 billion–a34.3 billion from a34.3 billion prior guidance, reflecting over a31 billion reduction from FY26 as fibre and 5G infrastructure mature. Dividend guidance remains low to mid-single digit growth until BBB+ credit rating metrics are met, after which enhanced shareholder distributions may follow.

Stabilisation Amid Legacy Network Phase-Out and Market Competition

Adjusted UK service revenue for continuing operations declined 1% year-on-year to a33.8 billion, with broadband and Corporate/Public Sector growth offsetting legacy voice declines. Openreach broadband lines decreased by 192,000 in Q1, with an expected full-year loss of approximately 800,000 lines as customers migrate from copper to fibre. This reflects the UK’s structural telecom shift from copper to fibre networks and accelerating next-gen broadband adoption.

Adjusted EBITDA of a32.0 billion continuing operations was broadly flat year-on-year excluding one-off items, with broadband and voice margin declines offset by cost transformation gains. The company did not specify competitive pricing or churn impacts in Business services but indicated revenue stabilisation following prior challenges. Immediate share price reaction to the Q1 update was unclear, though investors will likely monitor BT’s ability to sustain EBITDA growth and cash flow as legacy voice networks phase out and fibre investments plateau.