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What next for the BT share price?

first_img Ben Race owns shares in BT. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Enter Your Email Address Our 6 ‘Best Buys Now’ Shares “This Stock Could Be Like Buying Amazon in 1997” Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Ben Race | Friday, 28th August, 2020 | More on: BT-A The BT (LSE:BT-A) share price is down 28% this calendar year. During the same period, the FTSE 100 index is down only 15%. Over the past two years the telecoms giant has lost over half of its value. The share price is now so low, it is rumoured to be an attractive takeover target. So what is next for the BT share price?Share price woesThere are plenty of reasons why the BT share price has plummeted. The company has net debt of £18bn and pension liabilities of £50bn. The interest payment on the pension deficit alone is over £700m a year.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…The roll out of Britain’s 5G network was meant to be an excellent opportunity to revive the companies fortunes. However, the government restrictions on the use of Huawei products will cost the company £500m.Despite its huge debt, the company is still obligated to find an estimated £12bn to upgrade the nation’s fibre network by the end of the decade.The share price reached its lowest point when it was announced the dividend payment was being cancelled until 2021–22.There are positivesThe jewel in the crown is Openreach. This is the fixed network arm of BT and is responsible for maintaining the UK’s telephone and broadband infrastructure. The division is highly profitable and has a virtual monopoly in its sector.The performance of mobile phone network EE has been a positive. Implementing cross-business synergies since its acquisition has largely contributed to its success. Revenues at BT Sport predictably suffered due to the cancellation of live sport in the spring. However, the recommencement of Premier League football and other sports provides a unique television offering. This guarantees regular revenues from monthly subscriptions.Implementing cost cutting measures is essential to help fund the Openreach infrastructure improvement programme. The company aims to reduce operating costs by around £1bn each year by 2023, rising to £2bn each year from 2025. The decision to cancel the dividend until 2021–22 will help. If BT can reduce its debt burden and re-invest the proceeds successfully, there is no reason why the share price will not rise in the long term. Share price recovery?The share price fall values BT at just £10bn. The price is so low the company is on alert for potential takeover approaches. Investors have reacted positively to this news, which has led to a mini-share price bounce this week. Openreach is the main attraction for any party contemplating a takeover bid. It is currently valued at twice the price of the parent company.Any potential takeover will be very difficult to facilitate. It is a highly regulated business and new owners will have to guarantee the security of the pension liabilities. The future of BT is not just a business issue, but a very politically sensitive issue.It seems to me that for every pound BT saves, it needs a further two pounds. One pound to invest in capital investment programmes and one to reduce its debt pile. I think this cycle isn’t going to end any time soon and do not foresee a sustained share price recovery. Simply click below to discover how you can take advantage of this.center_img I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Image source: Getty Images. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. What next for the BT share price? See all posts by Ben Racelast_img read more