BT.A Bt Group Plc

By Adam Clark

Shares in BT Group PLC (BT.A.LN) fell on Friday after the U.K.'s opposition Labour party proposed partly nationalizing the telecommunications provider to put free broadband in every home and business.

Ahead of a speech by Labour leader Jeremy Corbyn on Friday, the party said its proposals would cost around 20 billion pounds ($25.7 billion) and could be funded by a tax on technology giants such as Amazon.com Inc. (AMZN), Alphabet Inc. (GOOG), and Facebook Inc. (FB).

BT Chief Executive Philip Jansen subsequently told the BBC that the plans could cost closer to GBP100 billion.

Shares in BT traded down 2.6% at 1055 GMT, with investors seemingly sceptical of Labour's chances of winning a majority in the U.K.'s upcoming election on Dec. 12.

Labour said the cost of bringing the relevant parts of BT into public ownership would be set by the U.K. parliament and paid for by swapping bonds for shares. The party also proposes nationalizing gas, electricity and rail networks.

"Current polling suggests Labour is unlikely to win a majority in the looming election, however if the party was to enjoy a late surge in the polls, BT shareholders might start to get a little bit more nervous," Russ Mould, a director at investment platform AJ Bell, said.

"This would be another headache the company doesn't need as it also contends with questions over its dividend policy as well as the pressures of its existing investment in fiber broadband and 5G mobile," he said.

BT's Openreach division, which is the biggest player in U.K. fiber broadband, is already under pressure to speed up deployment. Less than 10% of U.K. premises currently have fiber connections, which offer faster speed than copper cabling. Labour's plan calls for universal provision by 2030.

Prime Minister Boris Johnson has said his Conservative party would make fiber available for all homes by 2025 with a GBP5 billion investment.

Labour didn't specify how it would deal with a number of smaller players in the U.K. broadband industry, including Virgin Media, a subsidiary of U.S. company Liberty Global PLC (LBTYA).

Sky News reported on Friday that BT's smaller rival TalkTalk Telecom Group PLC (TALK.LN) had been forced to postpone the planned sale of its own fiber-infrastructure arm until after the election due to Labour's proposals.

Sky said TalkTalk was close to striking a deal with CityFibre, a venture partly owned by Goldman Sachs Group Inc. (GS). TalkTalk said it remains in advanced negotiations with interested parties over the business.

Write to Adam Clark at adam.clark@dowjones.com

(END) Dow Jones Newswires

November 15, 2019 06:30 ET (11:30 GMT)

Bt (LSE:BT.A)
Gráfico Histórico do Ativo
De Mar 2024 até Abr 2024

Bt (LSE:BT.A)
Gráfico Histórico do Ativo
De Abr 2023 até Abr 2024