BT puts more fibre in Drahi defences

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A BT Openreach engineer is seen working near Manchester, Britain, March 3, 2016. REUTERS/Phil Noble

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LONDON, Nov 4 (Reuters Breakingviews) - BT’s (BT.L) defence against agitation from new shareholder Patrick Drahi may hinge on its engineers’ ability to rip up Britain’s roads. The 15 billion pound telecoms operator has managed to shave 50 pounds off the cost of laying broadband cable past the average UK home, a 15% reduction. Given Chief Executive Philip Jansen’s plans to hook up another 19 million properties over the next five years, it should lop a whopping 1 billion pounds off his Openreach network’s cumulative capex bill. That makes it harder for billionaire tycoon Drahi, who recently snapped up a 12% stake, to argue for a shakeup.

Combined with higher-than-expected fibre subscriber numbers, Jansen had the confidence to reinstate BT’s dividend, suspended last year. It has also let him shelve plans to bring in outside investors to fund the final 5 million homes of Openreach’s rollout. That could have been the template for a wider spinoff. If Drahi has his eye on such an outcome, he’s going to have to build a stronger case. (By Ed Cropley)

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Editing by Neil Unmack and Oliver Taslic

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