BT chief 'open minded' on sale of stake in Openreach

LONDON (Reuters) - BT BT.L Chief Executive Philip Jansen is "open minded" about the possibility of selling a stake in the British company's Openreach infrastructure unit once there is full clarity on the regulation of fibre networks next year, he said on Wednesday.

FILE PHOTO: BT Tower owned by British Telecom is pictured in London, Britain, November 15, 2019. REUTERS/Simon Dawson

“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 was one such undervalued asset, reflecting in part the regulatory uncertainty facing the unit.

“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.”

But it made strategic sense to keep Openreach, he added.

BT is waiting for regulator Ofcom to decide on the return it will be able to make on its planned 12 billion pound ($16 billion) fibre-to-the-premise build-out. A ruling is expected in March or April.

Jansen said Ofcom was focusing on the right areas, such as price indexation and forced migration to new networks.

“The bit still uncertain is how is the fair bet going to actually work,” he said. “There has to be a fair return.”

“I am very confident we will land in the right place, but we’ll have to see how that gets articulated.”

Jansen was less enthused about any opportunity to further monetise BT’s mobile infrastructure, such as its towers, a strategy being pursued by rival Vodafone and others.

“There are things that we can consider but we are not really interested in sale and leaseback,” he said.

Reporting by Paul Sandle; Editing by Mark Potter