BT shares fall following reports of Virgin Media deal plans
By Rob Griffin
12:00, 4 October 2021
Shares in BT Group fell today on reports that Sky is looking to invest in rival Virgin Media O2’s broadband plans.
The Sunday Telegraph reported that Sky was closing in on a deal to back the telecom operator’s full-fibre rollout. The deal would result in 14m homes and businesses upgraded to ultrafast broadband, according to the report.
BT’s stock price had fallen more than 5% to 151p per share by lunchtime on the London markets.
Growing competition
Russ Mould, investment director at AJ Bell, attributed BT’s share price fall to the prospect of it facing “growing competition” from Virgin Media if the deal is completed.
There were also reports that UBS analysts believe a deal between Sky and Virgin Media would put pressure on Openreach’s market share and wholesale rates.
BT/Openreach could lose more than £600m of very high-margin revenue if an agreement is reached between the two businesses, according to UBS.
No comment
A Sky spokesman told Capital.com it would not comment. We have also asked Virgin Media O2 for a response.