EE deal strengthens BT's network position, says Nomura

LONDON (ShareCast) - BT Group (LSE: BT-A.L - news) was dialling the right numbers with investors on Wednesday after Nomura lifted its target price on the stock from 520p to 550p and kept a 'buy' rating. The broker said that the telecoms group has a "structurally robust platform for growth" now it has acquired mobile network EE.

"Following the acquisition of EE, BT has secured a strong network position at a time when European regulators (and Ofcom) are incentivising network investment; and it will stand alone as the only integrated operator in the UK with the benefit of network economics on both fixed and mobile services," said analyst James Britton.

He said that the deal should ensure a "competitive proposition" in the long term in a market that it likely to experience further consolidation over time.

"We modify our previous view of margin decline in the long term and now assume stable profit levels," Britton said.

The stock was up nearly 1% at 461.05p by 11:24.