BT has opened the door to a sale of a stake in infrastructure division Openreach as the telecoms giant battles a declining share price.
Chief executive Philip Jansen said he was “open minded” about offloading a stake once a regulatory review into full-fibre networks has been completed next year.
“We feel — I feel — that really BT is undervalued for the kind of business that we are and the assets that we have,” he told Morgan Stanley’s Technology, Media and Telecom conference.
He said Openreach, which is responsible for rolling out full-fibre broadband across the UK, was one of those undervalued assets.
However, Jansen said the company was waiting for the outcome of an Ofcom review that will determine the return it can make on its £12bn broadband investment.
“Would I be open minded about looking at a minority interest on it, moving that on to someone else? Potentially. But I can’t see us doing that until well after we’ve agreed the regulatory framework, until March, April next year.”
Jansen added that it made strategic sense not to sell off Openreach completely.
It marks a change in position from May, when executives played down reports that BT was in talks to sell a stake in Openreach that would value the division at £20bn.
Any sale at this valuation would mean Openreach would dwarf its parent company. A slide in BT’s share price in recent years has driven its market capitalisation down to just £12.5bn. This is roughly the same amount it paid to buy EE in 2016.
A sale would reflect a growing trend of telecoms companies cashing in on valuable infrastructure assets, as growing competition squeezes margins ever tighter.
Vodafone has spun off its mobile masts division into a separate business — Vantage Towers — which it plans to list in Germany early next year, while Three owner CK Hutchison this month agreed a €10bn sale of its European masts unit to Spanish firm Cellnex.