BT Group Shares Hit After Sky Reaches Deal With Rival CityFibre

By Pierre Bertrand

BT Group shares fell after customer Sky agreed to use the broadband network of CityFibre, a rival to the British telecommunications company.

In midday trading in Europe, BT shares fell 7.1% to 135.25 pence.

As part of a long-term partnership, Sky's fiber broadband services will be available on CityFibre's network in 2025, the companies said Tuesday.

The move comes as CityFibre, which is financially backed by both the Abu Dhabi wealth fund Mubadala and by Goldman Sachs, works to expand its network from 3.8 million premises in the U.K. to at least 8 million.

Eventually, Sky's fiber broadband services on the network will also reach more than 1.3 million homes in so-called hard-to-reach areas.

"This was expected as the U.K.'s fiber broadband market becomes ever more competitive," said a spokesperson for BT's Openreach network where Sky is currently hosted.

Sky--part of Comcast--has been the largest third-party internet provider on Openreach's network and a shift to another wholesale partner in addition to BT has been a long-term concern for BT investors, Citi analyst Siyi He wrote in a note to clients.

Write to Pierre Bertrand at pierre.bertrand@wsj.com

(END) Dow Jones Newswires

August 20, 2024 06:40 ET (10:40 GMT)

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