BT Group Plc

Ares Management has warned the Government that forcing through a BT takeover of TalkTalk would damage Britain's standing as a destination for international investment. In a letter sent on Sunday to officials, Ofcom and the Competition and Markets Authority, the US private credit giant said the proposed deal would undermine the UK's pro-business credentials and weaken incentives to invest in the UK's network infrastructure. Ares holds a 7pc shareholding in TalkTalk and has lent the business well more than £500m, including over £380m in funding to TalkTalk alone since August 2024, and is itself rivalling BT to take over the debt-ridden broadband provider. The letter also accused BT of stifling a rival bid from private equity firm Epiris and Ares and of abusing its position as a supplier to remove competition from the market. BT's dominance of the UK broadband sector means its takeover would require ministers to override competition laws, with the Government preparing to invoke pandemic-era laws to help rescue the company, and it was reported on Sunday that BT was preparing a new offer after TalkTalk rejected its initial approach.

Private equity firm Epiris has asked BT's Openreach division for a three-month payment holiday worth around £200m-£250m as part of its bid to buy TalkTalk's wholesale arm PXC, with PXC also owing Openreach roughly £100m in outstanding debts following a partial payment made this week, bringing the total value of the requested waiver to about £300m. BT has yet to formally respond to the request, and Sky News reported on Wednesday that rejecting the proposal could pave the way for BT to take control of PXC despite apparent competition hurdles. Epiris, which is also in the midst of a takeover bid for London-listed Gamma Communications, plans to invest a substantial sum into PXC if it buys the business through a pre-pack insolvency process, and is proposing that Openreach share in proceeds from any future sale above an undisclosed threshold. PXC typically pays between £60m and £80m a month to Openreach, making it TalkTalk's biggest supplier, and serves thousands of vulnerable customers as well as hospitals, doctors' surgeries and other critical national infrastructure. Both the sale of PXC to Epiris and the sale of TalkTalk's consumer arm, which has about 1.7 million customers, to Ares Management would be implemented via pre-pack administration overseen by Alvarez & Marsal; if no orderly pre-pack can take place, TalkTalk is likely to collapse by the start of next week, with BT the obvious buyer as the government seeks to avoid hundreds of thousands of customers losing broadband supply. TalkTalk confirmed last Friday that it was in advanced negotiations and expects to conclude both transactions imminently, while Epiris, TalkTalk and BT all declined to comment.

Bernstein downgraded Deutsche Telekom to market-perform from outperform and cut its price target to €28.10 from €37, citing uncertainty around a possible merger with T-Mobile US, intensifying competition in German fixed-line broadband and a neutral view on T-Mobile US from its U.S. team. The brokerage said a potential outright combination with T-Mobile US would give Deutsche Telekom full exposure to the U.S. operator's growth prospects, but questioned whether the transaction would generate sufficient industrial synergies to justify the deal. Bernstein estimated that a takeover involving a 20% premium for T-Mobile US minority shareholders would dilute Deutsche Telekom shareholders by about 11%, and flagged potential flow-back pressure as former T-Mobile US shareholders would own about 42% of the combined company. The possible deal adds to existing concerns around Deutsche Telekom's German business, where Bernstein said German broadband revenue growth had slowed to 1.7% year-on-year in the first half of 2026 from 4.5% in the second half of 2023. Bernstein's U.S. team rates T-Mobile US market-perform with a $220 price target, while for BT the brokerage retained its outperform rating, raised its price target to 235 pence from 230 pence and named the British telecom operator its top pick among European telecom stocks. Elsewhere in the sector, Bernstein downgraded Tele2 to market-perform from outperform on valuation with a price target of 166 Swedish krona, and retained underperform ratings on Telia and Elisa.

Vodafone, Virgin Media O2 and BT-owned EE are lobbying the UK government to water down net neutrality rules so they can prioritise certain internet traffic on their 5G networks. Vodafone has launched a premium 5G service called SuperMobile that promises speeds up to four times faster than regular 5G, while EE has introduced its own fast-lane service for crowded locations such as Wembley Stadium. The push follows Ofcom's 2023 revision of net neutrality rules, which clarified that mobile and broadband operators can offer premium services, and comes as part of the ongoing mobile market review. Vodafone SuperMobile will cost contract customers an extra £3 a month, while EE's upgraded service will cost an extra £5. Critics warn the changes risk creating a two-tier internet in which internet service providers become commercial gatekeepers, relegating everyday users and smaller businesses to the digital slow lane.

Verizon is expanding its AI infrastructure strategy through a dark fiber agreement with Google and participation in Anthropic's Project Glasswing, with management expecting additional AI infrastructure agreements that could begin contributing to revenue growth in 2027. The company is also forming a planned joint venture with BT Group to strengthen international enterprise connectivity by combining complementary wireline assets. Verizon continues to combine wireless, fiber broadband, and fixed wireless access into integrated offerings such as Verizon One, believing converged customers exhibit lower churn and stronger lifetime value. The company carries a Zacks Rank #3 (Hold) with a Value Score of A, Momentum Score of A, and VGM Score of A, while its Growth Score of C suggests a measured growth profile as these longer-term initiatives mature.

Verizon Communications is strengthening its long-term investment story through improving subscriber trends, broadband expansion, disciplined execution, and new enterprise initiatives. The company posted stronger postpaid phone additions while reducing churn, and introduced Simplicity wireless plans, Verizon One, and an expanded loyalty program. Broadband growth remains a major contributor as Verizon expands fixed wireless access and integrates Frontier's fiber assets, while a larger fiber footprint increases addressable markets and supports cross-selling opportunities. Disciplined execution helped Verizon deliver record adjusted EBITDA, higher adjusted EPS, and stronger free cash flow, prompting management to raise its financial outlook for mobility and broadband service revenues, adjusted EPS, and free cash flow. Beyond consumer wireless, Verizon is expanding into AI infrastructure through a dark fiber connectivity agreement with Google and plans a joint venture with BT Group to strengthen international enterprise connectivity.

BT Group and Verizon Communications have agreed to merge their international enterprise operations into a 50:50 joint venture serving more than 3,000 customers across over 180 countries. Verizon will make a US$625 million equalization payment, with completion targeted for 2027 pending regulatory approvals. The alliance aims to create a large-scale, cloud- and AI-focused enterprise connectivity platform for secure cross-border networking and managed services. The deal could influence Verizon's cash flow narrative by pooling international assets, though the most immediate catalyst remains execution on fixed wireless and fiber growth, while intense U.S. wireless competition and churn pressure remain the biggest risks.

Verizon shares dropped 7.6% to $43.02 and AT&T touched a 52-week low of $21.29, sliding 5.8% to $21.41, as three competitive threats rattled legacy US telecom carriers on Monday. T-Mobile also fell 6% to $171.78, testing its 52-week low. SpaceX told investors it plans to launch a Starlink mobile service for US consumers, directly competing with the Big Three, and secured licensed AWS-3 spectrum in an FCC auction. Bloomberg reported that SpaceX and Charter Communications held talks about a consumer mobile partnership, while BT Group and Verizon announced a 50:50 joint venture for international enterprise operations valued at $625 million, with Verizon paying that sum to BT. Comcast rose 7.2% after announcing a spinoff of NBCUniversal and Sky, potentially creating a more focused broadband competitor.

BT Group and Verizon Communications have agreed to combine their international enterprise operations in a 50/50 joint venture, with Verizon paying BT a $625 million equalisation fee. The new entity will serve more than 3,000 customers across over 180 countries and generate approximately $4 billion in combined annual revenue. The deal concludes BT's search for a buyer of its international business and supports CEO Allison Kirkby's strategy to refocus on the UK market while targeting £3.7 billion in savings by 2030. Martijn Blanken has been named CEO-designate of the joint venture, which will be incorporated in Jersey and headquartered in the UK.

Comcast shares surged 13% in premarket trading after the company announced plans to spin off NBCUniversal and Sky into a separate publicly traded company in a tax-free transaction expected to close within a year. Viridian Therapeutics climbed 10.2% following FDA approval of Lumvoa for thyroid eye disease, its first commercial product. Doximity fell 5.1% amid continued pressure from analyst price target cuts after weak fiscal 2027 revenue guidance. Verizon Communications gained 1% after agreeing with BT Group to combine international enterprise operations into a 50:50 joint venture serving over 3,000 multinational customers. SpaceX rose more than 1% on news it will join the Nasdaq-100 Index on July 7.

European stocks were subdued on Monday, with the pan-European Stoxx 600 marginally lower at 635.36, while technology shares rallied after South Korea announced a $576 billion semiconductor and AI investment plan backed by Samsung and SK Hynix. The German DAX was marginally higher, France's CAC 40 dropped 0.4 percent, and the U.K.'s FTSE 100 slipped 0.2 percent as crude oil prices rose slightly on renewed U.S.-Iran tensions. Technology stocks gained, with ASML Holding, Infineon, and STMicroelectronics climbing 1 to 3 percent. Nordex Group shares rose about 1 percent after securing a 325-MW order in the United States, while Prosus N.V. rallied 2.4 percent after reporting an 84 percent jump in full-year adjusted core profit. French biotech Ipsen advanced 1.7 percent after agreeing to acquire U.S. biotech Kartos Therapeutics in a deal worth up to $1.75 billion, and BT Group rose about 1 percent after signing an agreement to combine its international business in a joint venture with Verizon.