In 2025, BT (BT.A) is going to shut down the UK’s public switched telephone network (PSTN) and move its customers to its Openreach network. This means no more landlines. Soon, all communication will go through fibre-optic cables.
Tip style
Growth
Risk rating
Medium
Timescale
Long Term
Bull points
- Strong cash generation
- Almost all revenue is recurring
- Stable margins
- Appealing cheap valuation
Bear points
- Macro headwinds facing customers
- Competition from telecoms rivals
BT hopes this move will mean big returns on the billions it has spent on fibre-optics. But under the radar there is another beneficiary of this transition. Gamma Communications (GAMA), a self-described unified Communications-as-a-Service company, provides software that allows customers to make calls over the internet. In effect, this equates to a service that integrates traditional phone lines, mobile phones and the internet.