BT Faces Revenue Hit as Customers Abandon Landlines
BT is bracing for a revenue shortfall of up to £200m this year as thousands of customers abandon traditional landlines for digital alternatives. The telecoms giant expects revenues to fall by between £150m and £200m as the UK transitions away from its ageing copper telephone network. However, BT said the impact would be temporary, with higher demand for full-fibre broadband services expected to offset the losses over time.
The company also anticipates lower customer support costs once the switchover is complete.
The update comes as BT continues to cut jobs, with a further 18,000 positions lost over the past six months. The reductions are largely linked to a declining need for engineers as the company approaches the completion of its full-fibre broadband rollout. BT’s total workforce stood at 90,000 at the end of September.
Millions still need to switch to digital landlines
The UK is moving away from the traditional Public Switched Telephone Network (PSTN), which relies on copper wires, towards digital phone services delivered through internet connections.
BT transferred 1.1 million customers to digital services during the first half of the financial year. However, around one million homes and businesses are still dependent on the old copper network, with the January switch-off deadline approaching.
The company said more than three million households had already made the move.
A BT spokesman said: “More than three million households have now made the move to a digital landline, benefiting from a safer, more reliable service ahead of the industry-wide analogue switchover in January 2027.
“As we focus on the small minority of our customers yet to make the switch, protecting those who need extra support remains our top priority.”
The approaching deadline has raised concerns that vulnerable households and businesses could lose access to essential telephone services.
Customers who have not switched by the deadline may be moved to temporary emergency phone services, while others could be disconnected altogether.
The original target was to complete the transition by the end of 2025. However, this was postponed following concerns that elderly and vulnerable customers could be put at risk.
BT is also discussing a broader shutdown of its copper network with the Government and Ofcom, which would eventually affect broadband connections as well as traditional landlines.
BT reports signs of a financial turnaround.
Despite the expected revenue hit, BT reported its first revenue increase in two and a half years, along with higher pre-tax profits over the six months.
The company’s service revenue is forecast to reach between £15.1bn and £15.4bn for the full year, compared with £15.4bn in the previous year.
Stronger handset sales boosted performance, while BT reduced costs by £312m in the first half. This puts the company halfway towards its £3.5bn cost-saving target.
Meanwhile, its Openreach division lost a further 366,000 broadband customers during the period as competition from newer providers intensified. However, the losses were lower than those recorded last year.
Openreach has now passed 10 million connections on its full-fibre network and remains on track to reach its target of 25 million homes by March.
BT shares climbed 5% after the company announced an increase in its interim dividend to 2.5p per share.
Pressure mounts across the broadband industry
BT’s latest results come amid growing pressure across the UK’s highly competitive broadband market.
Rivals including Virgin Media O2 and CityFibre face mounting financial pressure as the costs of their debt-funded network expansion programmes continue to rise.
BT has also moved to strengthen its position through a £400m deal agreed last month to rescue struggling broadband provider TalkTalk.
The agreement required Government intervention to override competition concerns and is currently undergoing regulatory scrutiny. Culture Secretary Lisa Nandy is expected to deliver a final decision shortly.
While the loss of traditional landline customers presents a short-term financial challenge, BT is betting that the transition to digital services and the continued expansion of full-fibre broadband will provide a stronger foundation for future growth.