BT Group & Vodafone: 2 FTSE 100 telecom stocks to buy for golden years  

Highlights 

  • Virgin Media O2 was the most complained-about broadband, landline and pay-TV provider in the country.
  • In fixed broadband complaints per 100,000 subscribers for Virgin Media was 33, while that for BT and Vodafone it was 15 and 24 per 100,000, respectively.
  • Vodafone’s M-Pesa platform reached 50 million active customers per month, making it Africa's leading fintech platform.

In the latest Telecoms and pay-TV complaints report by UK regulator Ofcom, Virgin Media O2 was the most grumbled-about broadband, landline and pay-TV provider in the country. The company’s poor handling of customer complaints, issues related to changing provider, pricing, billing, and charging issues. were attributed as top reason behind this.

The number of fixed broadband complaints per 100,000 subscribers for Virgin Media was 33, while that for BT and Vodafone was 15 and 24, respectively. Similarly, Virgin Media recorded 19 complaints per 100,000 landline subscribers, while BT and Vodafone recorded only 9 and 12 complaints, respectively. Virgin Media also topped the total volume of pay-TV complaints per 100,000 subscribers.

The UK houses several telecom service providers offering a host of services ranging from mobile to broadband. This offers investors a wide choice regarding which telecom stock to buy. Here we take a closer look at two FTSE 100 listed telecom stocks and explore the investment prospect.

BT Group Plc (LON: BT.A)

BT Group is an international telecommunications provider with operations in nearly 180 countries. The company offers fixed-line, mobile and broadband services in the UK and IT and subscription television services. For the quarter ended 30 June 2021, BT Group reported revenue of £5,071 million compared to £5,248 million for the same period in 2020. The company’s profit before tax declined slightly to £536 million for the quarter ended 30 June 2021 compared to £561 million for the same period in 2020.

BT Group reported an adjusted EBITDA of £1,866 million for the quarter ended 30 June 2021, representing a year-on-year increase of 3% or £53 million. The company’s normalised free cash flow improved by £6 million to an outflow of £43 million on account of lower cash tax payments and improved EBITDA.

The shares of BT Group traded at GBX 164.35, down slightly by 0.27% at 8:19 AM on 7 September 2021. The company’s shares gave a return of 61.73% in the last one year to shareholders, and the market cap stood at £16,345.75 million.

Vodafone Group Plc (LON: VOD)

Vodafone Group is a telecommunication company offering mobile and fixed communication, unified communication, cloud hosting, the internet of things (IoT), and security & carrier services. Recently, the company’s fintech platform M-Pesa recorded 50 million active customers per month, making it Africa's leading fintech platform.

For the Q1 FY22, Vodafone reported revenues of €11,101 million, up from the previous year’s £10,506 million. The company’s roaming and visitor revenue registered a growth of 56% year-on-year but is still 54% lower than Q1 FY20 (pre-pandemic).

The shares of Vodafone Group traded at GBX 121.50, down slightly by 0.08% at 9:12 AM on 7 September 2021. The company’s shares gave a return of 15.47% in the last one year to shareholders, and the market cap stood at £33,614.70 million.

Bottom line

Telecom companies offer the technology that helps us connect to the world through phone, internet, and television services and the required infrastructure to support them. Consequently, the telecom sector serves as an attractive investment opportunity to relatively conservative investors seeking stable dividend income.

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