If Huawei is unravelled can BT and Vodafone pay their dividends?
The UK’s two telecoms giants have always been held for their income. Ramping costs have already put that payout under threat – both companies have slashed their dividends in the last year – but the income could be under further strain now that the UK government is threatening to block Huawei from the 5G mobile network. Without the dividend, are the shares worth holding?
In the last three years, BT (LON: BT.A) and Vodafone (LON: VOD) have returned £15.2bn and £9.0bn worth of dividends to their respective shareholders. Few British companies have paid back more. Indeed, both telecoms giants have been among the country’s top ten dividend payers in every year of the last decade, with the latter periodically taking the top spot whenever it has sold a division and can afford to pay a special. But a focus on dividends has distracted both companies from their primary goal: building a strong telecommunications infrastructure. In its latest State of Mobile Networks report, mobile analytics group Opensignal…