BT's share price fell more than 4% during Friday morning trading in London after it reported sales declines at all its major units bar the Openreach networks business for the first three months of its fiscal year.

The UK telecom incumbent's trading update showed a 1% drop in overall revenues for the June-ending quarter, to about £5.6 billion (US$6.8 billion), compared with the year-earlier period. Adjusted earnings (before interest, tax, depreciation and amortization) were also down 1%, to £1.96 billion ($2.4 billion).

CEO Philip Jansen, who took charge of the company in February, said BT remained on track to meet a full-year target of £7.2-7.3 billion ($8.7-8.8 billion) in adjusted EBITDA, down from £7.4 billion ($9 billion) in the previous fiscal year, but alluded to the difficult market environment in which it now operates.

"In building a better BT for the future we need to be even more competitive," he said in published comments. "We will continue to take decisive action, including on price, to further strengthen our customer propositions and market position, both to respond to any short-term market pressures and to capitalise on longer-term opportunities."

BT faces one of the most turbulent periods in its long history, with the transition to higher-speed 5G networks, the emergence of new infrastructure rivals and the prospect of a no-deal Brexit later this year.

It boasted the launch of the UK's first 5G network in May but was quickly followed by Vodafone, which threatened a new price war with its range of low-cost unlimited-data tariffs. Three, the smallest of the UK's four mobile networks, has also promised similar low-cost "all-you-can-eat" deals when it introduces its own 5G service later this year.

Revenues at BT's consumer division -- which includes the EE mobile business it bought in 2016 -- shrank 1%, to £2.55 billion ($3.1 billion), while EBITDA fell 5%, to £588 million. BT blamed regulation and pricing moves for a 4.6% drop in average revenue per contract customer, to £20.70 ($25.10), compared with the year-earlier period.

BT also faces a broadband challenge from companies including cable operator Virgin Media, which recently announced plans for a major network upgrade, and CityFibre, a Goldman Sachs-backed wholesale rival that aims to cover about 5 million UK properties with all-fiber networks in the next few years.

Under regulatory and competitive pressure, BT is extending all-fiber networks to about 4 million properties by March 2021 and has said it could aim for another 11 million by 2025 if the investment conditions are acceptable.

Boris Johnson, the UK's new prime minister, has outlined an ambition of building all-fiber networks everywhere by 2025, eight years sooner than a previous government target, without saying where the funding would come from. All-fiber access networks are currently available to just 8% of UK homes.

The Johnson plans have been derided by several experts and were described as a "stretch target" by Openreach CEO Clive Selley at the recent Connected Britain event in London, before Johnson became prime minister.

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Wary of criticizing the scheme and upsetting the UK's new leader, broadband stakeholders have subsequently been more guarded, offering support but urging authorities to ease regulation.

"On network investment, we welcome the government's ambition for full fibre broadband across the country and we are confident we will see further steps to stimulate investment," said Jansen in today's statement. "We are ready to play our part to accelerate the pace of rollout, in a manner that will benefit both the country and our shareholders, and we are engaging with the government and Ofcom on this."

Openreach revenues ticked up 1%, to around £1.27 billion ($1.54 billion), while earnings were flat at £717 million ($868 million). But there was further sales disappointment at the ailing enterprise and global services divisions, with both suffering a 5% drop in revenues. BT blamed a "declining trend" in the traditional lines and calls market for the enterprise upset and said its decision to quit low-margin contracts was largely responsible for the poor results at global services.

At Openreach, the growing likelihood of a no-deal Brexit has fueled concern about reliance on European workers, Selley previously told the Connected Britain conference. "I'm worried about access to the wider labor pool and that is why we are hiring into Openreach rather than relying on third parties who use European labor," he said. "Large-scale FTTP [fiber-to-the-premises] is a labor-intensive business."

BT had nothing to say about employee numbers in today's trading update, but its headcount has risen despite efforts to cut 13,000 back-office and management jobs as it recruits technicians for its fiber rollout.

While it cut 4,000 positions in its last fiscal year, overall headcount was up 1,000, to 106,742 employees, according to a previous earnings statement.

BT's share price was 185.50 pence sterling at the time of publication and has fallen by a fifth so far this year. Data compiled by Light Reading shows it has more than halved in the last three and a half years.

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— Iain Morris, International Editor, Light Reading