BT GROUP (BT-A) SHARES: 2025 PERFORMANCE IN UK, KEY DRIVERS, MILESTONES AND RISKS —'26 OUTLOOK

BT Group shares in 2025: Overview and performance

BT Group plc (LSE: BT.A), one of the UK’s leading telecommunications and broadband companies, presented a year of cautious transformation in 2025. As the company continues to navigate competitive and regulatory pressures, its investment into fibre broadband infrastructure and digital transformation remained at the forefront of its strategic outlook. The performance of BT shares in 2025 reflected a mix of cautious optimism and broader macroeconomic uncertainty.

In 2025, BT Group’s shares hovered within a narrow price band. The company began the year with shares trading around 120p and fluctuated between 115p and 135p during the first half. By the close of Q4 2025, BT shares ended close to 130p, reflecting modest growth amid difficult operating conditions. This restrained movement signals investor hesitation amid ongoing changes in leadership, digital strategy, and potential regulatory reforms in the UK telecoms space.

Notably, BT’s full-year earnings demonstrated marginal top-line revenue growth, supported by increasing Openreach fibre broadband uptake. However, pressure on margins due to inflationary costs, maintenance expenditure for legacy networks, and flat-to-declining revenues in traditional voice services continued to affect performance. Operating profits faced minor compression, but free cash flow remained resilient due to disciplined capital expenditure control.

Key performance highlights in 2025 included:

• Steady growth in Openreach’s fibre-to-the-premises (FTTP) coverage, crossing the 15 million premises milestone
• BT Consumer maintained broadband subscriber numbers, but mobile market share saw marginal pressure due to competitive pricing from rivals such as Vodafone and Three
• BT Business, the enterprise arm, faced slight contractions due to delayed IT spending by UK corporates amid a sluggish economic recovery
• Continued cost transformation programme contributing to £500 million in annualised savings

Investor reactions were tepid but cautiously constructive, with many recognising BT’s ongoing infrastructure relevance while questioning its capacity to drive high-margin growth. Dividends were maintained, bolstering BT’s appeal to income-focused portfolios despite subdued price appreciation.

Overall, BT’s 2025 share performance demonstrated stability in the face of systemic change and industry disruption. Investor focus remains trained on future cost containment, digitisation, and monetisation of BT’s extensive network assets as the company heads into 2026.

Key drivers and risks shaping BT Group in 2026

Looking ahead into 2026, BT Group’s direction and share performance will be influenced by a combination of internal business decisions and external market conditions. Several key growth drivers and material risks will define the scale and direction of BT’s value proposition over the coming year.

Potential growth drivers for 2026:

• Openreach network monetisation: BT-owned Openreach continues to be a crucial pillar. With full-fibre rollout accelerating, the monetisation of this asset could turn into a long-term revenue engine through wholesaling and leasing arrangements with competitors.
• Cost efficiency initiatives: BT’s ongoing cost-cutting strategy, targeting over £3 billion in digital and operational efficiencies across five years, could expand profit margins and free up capital for reinvestment or distribution.
• Digital transformation: Investments in AI, machine learning, and automation across BT Business and BT Consumer segments are expected to produce productivity gains and greater scalability of solutions offered to enterprises and customers.
• 5G and edge computing expansion: BT’s strategic partnership with Ericsson in expanding 5G capabilities remains key to sustaining mobile relevance and enterprise offerings amid growing demand for ultra-low-latency services.

All these developments frame BT as a significant participant in the UK’s digital infrastructure roadmap. If executed effectively, these avenues can offer upside for long-term investors.

Risks and challenges ahead:

• Regulatory intervention: As a quasi-monopoly in UK broadband infrastructure, BT continues to face scrutiny from Ofcom and the CMA. Any rule changes, especially concerning wholesale pricing, could impact margins significantly.
• Overbuild and competition: Alternative network providers (AltNets) such as CityFibre are expanding coverage, especially in dense urban areas. This poses a pricing dilemma and underlines the need for BT to maintain quality and service differentiation.
• Legacy infrastructure costs: The transition away from PSTN to digital infrastructure imposes capital commitments for both technology upgrades and consumer transition support, creating temporary downward pressure on free cash flow.
• Macroeconomic softness: Continued inflation, high interest rates, and slow UK GDP growth may delay enterprise IT and communication project pickups, particularly impacting the BT Business arm.

Therefore, investors should monitor BT Group’s strategic moves closely over the next 12 months. The company’s ability to balance capital expenditure, operating leverage, and shareholder returns will denote whether the share turns from a value trap into a digital infrastructure opportunity.

Milestones to watch and analyst sentiment in 2026

As BT Group progresses through 2026, several pivotal developments and milestones are set to shape investor confidence and sector positioning. Understanding these near-term signals can help inform sound portfolio decisions concerning BT shares.

Upcoming milestones in 2026:

• Completion of PSTN switchover: BT targets complete migration from the public switched telephone network to digital voice services by December 2026. Meeting this deadline efficiently will reflect operational delivery and customer management strength.
• 15 million FTTP activated users: Converting passed premises to paying customers defines monetisation success. The take-up rate will indicate whether capital investments deliver acceptable returns.
• Asset spin-off or partnership in Openreach: Rumours continue around BT exploring partial monetisation or partnerships in Openreach. Any confirmation will likely have valuation and debt-management implications.
• Regulatory guidance from Ofcom: A final ruling on fibre pricing regulation and digital network access mid-2026 could shift investor sentiment quickly, either favourably (leading to revenue uplift) or adversely (due to tighter pricing constraints).
• Dividend policy review: Investors are closely awaiting BT’s mid-year financial notice, expected to review current dividend policy for 2027 and beyond. A rise, reduction, or change in strategy here will influence income investors' positioning.

In addition to milestone tracking, analysts’ consensus remains moderately constructive. While valuation remains low on a price-to-earnings basis relative to peers, this is justified by limited near-term catalysts. However, some brokers, including Barclays and Credit Suisse, have issued overweight ratings on expectations of improved free cash generation from 2026 onwards.

Market expectations for BT shares in 2026:

• Share price volatility likely to continue within the 120p–140p band unless major developments occur
• 2026 EBITDA guidance from management, to be released in April 2026, will be a key investor signal
• Continued focus on fibre penetration rather than new product innovation as a growth path

In sum, 2026 presents both an opportunity for BT Group to validate its strategic initiatives and a challenge to efficiently monetise its infrastructure advantage. Investors should maintain a close eye on performance clarity, regulatory updates, and operational delivery throughout the year to reassess exposure regularly.