BT share price rises 6%+ as Bharti becomes largest shareholder! Time to invest?

I BT Group (LSE:BT.A) share price has risen sharply over the past six months. At 138.7p per share, the FTSE 100 The telecoms giant has risen by a whopping 32%.

It was also the Footsie's best performer in the first trade of the week, rising 6.3% on Monday (12 August). BT also woke up to news that India's Bharti Global has plans to become a major shareholder.

So what are the key takeaways from today's keynote update? And, most importantly, should I buy BT shares in my portfolio?

A new participant

Under the deal, Bharti will acquire a 24.5% stake in Footsie by buying the shares held by the French debt-equity company. Altice.

About 10% of the shares will be transferred immediately, and the remaining 14.51% of BT's outstanding capital will be acquired after obtaining the necessary regulatory approval.

Bharti will also apply for approval under the UK National Security and Investment Act, it said. The Indian company added that it has no intention of launching a full takeover of BT.

Bharti said it supports BT's “a transformational plan that aspires to deliver long-term, sustainable growth,” and especially its program”transforming the UK telecoms landscape by building fibre, rolling out 5G technology and developing market-leading services to live, work, play and learn.“.

Confidence builder

BT hasn't had the best of times lately. It is difficult to raise income as the UK economy has slowed down. The company also faced huge costs due to its broadband development plan.

But hopes have been growing that BT is over its worst problems. And for Hargreaves Lansdowne analyst Susannah Streeter, Monday's news raised investor hopes that BT is now a recovery stock.

He comments: “[Bharti] clearly sees great potential in Openreach, which is responsible for maintaining and building new fiber networks,” add “it is also likely to be encouraged by indications that the cost of building 5G infrastructure is likely to increase significantly, and once new customers are transferred to new networks, there is potential to reduce operating costs..”

Risk vs reward

It's clear that phone companies like these have huge potential for long-term growth. The demand for their services will gradually increase as our lives become more digital. And BT's expansion plan could put it in a strong position to capitalize on this.

However, it doesn't mean I'm ready to buy BT shares just yet. At the moment, I think the risks of investing continue to outweigh the potential benefits.

First, the company is struggling to grow revenue as the UK economy struggles. The latest figures showed profits falling by 2% in the three months to June. And, worryingly, many expect Britain's economy to remain weak for a long time.

The company's task of revitalizing sales is made more difficult by the greater levels of competition it faces.

In addition, while some costs may have peaked, BT's capital costs will remain high, the most capital-intensive type of telephone service. And given the company's already high debt levels – total debt rose by £700m last year, to £19.5bn – this makes me very uncomfortable.

Although BT's share price is rising, I still wouldn't touch it with a boat pole just yet.