BT Group Turns the Corner

After two years of problems at BT's global services division, the company appears to have turned the corner

Allan C. Nichols, CFA 18 October, 2011 | 10:08AM
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After two years of problems at BT's global services division, the company appears to have turned the corner. In addition, the firm is becoming much more aggressive with the broadband speeds it is offering.

With the Asian economies recovering faster than the rest of the world, BT is increasing its focus on this region. Currently the firm generates about £350 million of revenues in Asia, and management thinks it can grow this by about 6% annually. One concern we have here is that BT will chase growth with aggressive pricing, as it did when it made a push in the U.S. several years ago; that move later came back to haunt BT. The firm has also expanded its operations in Latin America in order to take advantage of faster growth in this region as well.

We are maintaining our fair value estimate for BT.

Read the full Morningstar Research Report on BT, including our fair value estimate, here. Morningstar Research is available to Premium subscribers.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
BT Group PLC144.55 GBX-0.76Rating

About Author

Allan C. Nichols, CFA  is a senior stock analyst and international investing specialist with Morningstar.

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