The BT Group (LSE:BT.A) share price has torn greater over the previous six months. At 138.7p per share, the FTSE 100 telecoms big has risen a powerful 32% in worth.

It’s additionally the very best Footsie performer in start-of-week buying and selling too, up 6.3% on Monday (12 August). BT’s soared once more on information that India’s Bharti World has plans to turn out to be its largest shareholder.

So what are the important thing takeaways from right now’s essential replace? And, extra importantly, ought to I purchase BT shares for my portfolio?

New stakeholder

Underneath the deal, Bharti will purchase a 24.5% stake within the Footsie agency by shopping for the shares held by debt-laden French telecoms agency Altice.

Virtually 10% of the shares can be transferred immediately, with the remainding 14.51% of BT’s share capital to be acquired following the receipt of vital regulatory clearances.

Bharti may even apply for clearance below the UK Nationwide Safety and Funding Act, it stated. The Indian firm added that it has no intention of launching a full takeover of BT.

Bharti stated that it helps BT’s “ambitious transformation program to deliver long-term, sustainable growth,” and extra particularly its plan “to rework the UK’s telecoms panorama by constructing fibre, rolling out 5G expertise and creating market-leading companies to dwell, work, recreation and be taught“.

Confidence-builder

BT hasn’t had the very best of instances extra just lately. It’s struggled to develop revenues because the UK economic system has principally flatlined. The agency’s additionally confronted colossal prices on account of its broadband build-out programme.

However hopes have been rising that BT’s over the worst of its troubles. And for Hargreaves Lansdown analyst Susannah Streeter, Monday’s information has boosted investor hopes that BT’s now a bona-fide restoration inventory.

She notes: “[Bharti] clearly sees great potential in Openreach, which is responsible for maintaining and building out the new fibre networks,” including that “it’s also likely to have been encouraged by indications that the cost of building 5G infrastructure may have peaked, and once new customers are moved over to the new networks, there is the potential for lower running costs.”

Danger vs reward

It’s clear that telecoms corporations like this have important long-term development potential. Demand for his or her companies is heading in the right direction to steadily rise as our lives turn out to be more and more digitalised. And BT’s growth programme may put it in a powerful place to take advantage of this.

Nevertheless, it doesn’t imply I’m prepared to purchase BT shares simply but. In the mean time, I believe the dangers of investing proceed to outweigh the attainable advantages.

First off, the agency’s struggling to develop revenues because the UK economic system struggles. Newest financials confirmed turnover reverse 2% within the three months to June. And, worryingly, many anticipate Britain’s economic system to remain weak for a very long time.

The corporate’s job to reignite gross sales is being made much more troublesome by the large ranges of competitors it faces.

What’s extra, whereas some prices could have peaked, BT’s capital expenditure payments will stay excessive, such is the capital-intensive nature of telecoms provide. And given the corporate’s already-high debt ranges — internet debt rose £700m final 12 months, to £19.5bn — this makes me massively uncomfortable.

Whereas BT’s share price is hovering, I nonetheless wouldn’t contact it with a bargepole proper now.