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" Whilst this may not be the intent of the Government, the threat nonetheless remains – and constitutes a material concern to
investors in infrastructure that is not dominant."
Exactly Aus, whoever may decide to build a network has to accept that others may be allowed access, will new money find this attractive to build it. Don't know, there is the risk that it would give cheap access to competitors, would they rather just be a competitor without the expense of network build. Then again nobody will want to use it, so its all ours, but if they then loose customers to other SPs they have had the expense of building a network that nobody uses.
That is why IMO the likes of Virgin will only choose to expand there network where they already have one rather than a full national one. Keep to there local hotspots with nobody else using there network and let BT spend the money building a full national network, that they can choose to jump on, or not. The thing is if that happens then BT will be seen as the company who gave high speed access to all, not just some.
Okay as I’m said, happy to be proved wrong. Here’s the actual facts on the matter whether OFCOM can force networks to be opened up.
You were right they can & it’s nothing to do with private investment
Non-SMP operators face the prospect of having to open their networks to third
I’ve lifted this from OFCOM website
43
parties under the Civil Infrastructure Directive.
The UK Government is currently considering how to transpose this Directive into UK legislation, with a focus on facilitating the sharing of infrastructure across sectors (i.e., making it easier for Communications Providers (CPs) to utilise the infrastructure of other utility companies such as energy or water networks). However, the Directive can, in theory, also be used to require owners of non-SMP networks to share their infrastructure with third party CPs. Whilst this may not be the intent of the Government, the threat nonetheless remains – and constitutes a material concern to
investors in infrastructure that is not dominant.
"Fleccy - I don’t think you are right about that. OFCOM regulate virgin but not its network. I don’t think OFCOM can do that as a purely privately funded resource."
I've read your posts Aus, but BT didn't inherit anything, BT was sold as an IPO. The Government don't own BT, or own any part of BT. The only thing BT related that the Government still has an interest in, is the Crown Guarantee on the pension. You're right, Virgin ovn their own ducts and their own fibres, but as you correctly state all its services are provided under licence. If OFCOM withheld their licence it would bankrupt them, so whichever way you look at it, if OFCOM says jump, Virgin would have to ask how high.
Aus Sky do not own a network in the UK they are simply a service provider, be that TV, BB or anything else. I think you are starting to get caught up in a world of disjointed information. By using your rational then BT could turn around and say the following parts of our network were provided after privation using private funds so nobody else can stick there network down or on it. As for OFCOM and Virgin then they may not regulate its network but the do its services delivered over it, that is any sort of communication service, therefor they could well insist that other SPs are given some access to it, in fact Virgin may well welcome allowing BT to provide services over there network, a good income stream with little cost to them, same as BT has to...
AW - I use the word guessing because I’m not overrun with Denning Kruger unlike some people on here
Rather than snide comments why don’t you prove me wrong, right now my proof is in the pudding that’s before your eyes
Does OFCOM force SKY to open up? Or Virgin ?
As I said happy to be proved wrong.
Not to say BT will have an easy ride, they won't. But at the prices we are seeing now, it could be a good entry point. I said about 120's a few days back but that was for bait. Not impossible it could hit that price but 158 last year was the lowest in years. Yes, there's debt but there always has been. Yes, there is competition but BT are the main player by a considerable margin. The grip of OFCOM has loosened slightly so although I agree you could make better money elsewhere, BT look a good opportunity at present. Might be worth waiting for the results for some definitive info. I don't personally see BT as in a "difficult position".
Fleccy - I don’t think you are right about that. OFCOM regulate virgin but not its network. I don’t think OFCOM can do that as a purely privately funded resource. I would cite SKY as evidence of this, SKY has paid for its dominance itself with private money, therefore are not forced to open access but are regulated
The difference I think is BT continues to gain advantage from public money by using existing ducts etc from public money
Happy to be proved wrong, but I cant see a regulator being able to force privately funded networks to open up
You used the word "guessing" Aus. Says it all.
NDN - I agree if BT don’t use the ducts etc they inherited from public money. I guessing that would triple the cost though, which further describes the difficult position they are in.
"C3P0 - virgin network is paid for with private money, there’s no way they will or can be forced to open up their super fast network to BT or any other provider they don’t want to."
Aus where do you get that idea, because the argument has no logic. BT is owned by the shareholders, not OFCOM, so the network is owned by the shareholders. If OFCOM decided to regulate Virgin Media, then Virgin Media would have to comply, otherwise OFCOM could take away their licence to provide services. Your statement is plainly wrong.
Well Aus that then answers the question of BT rollout of FTTP for BB, if the government do not supply funds then it also will be private funded for that part of there network, therefor no access for others, can't have it both ways.
C3P0 - virgin network is paid for with private money, there’s no way they will or can be forced to open up their super fast network to BT or any other provider they don’t want to.
"...It doesn't change the fact that BT/Openreach still own those ducts and poles and there will be a rental cost for use of the infrastructure, including POP's, if the relevant parties don't build their own. BT/Openreach will make money no matter what..."
Hmm... Goes some way to offer an explanation that despite years and years of declining revenue, net profit simply refuses to do likewise and roll over. To date it's done the direct opposite and increased y-o-y, right through this last 4 years of non-stop revenue decline.
Some debate whether by the time this year's final's complete in the summer whether this will be the first small decline in net profit, but it will be close, either way.
Main point is; net profit has yet to show a decline and is forecast to increase for the next couple of years - that's the current position. It can't all be coming from just cost savings alone.
Aus. " Virgin now have access to 54% of the population & growing"
So is the the population, ie several persons residing at the same place or property served directly by Virgin physical network ?
If you look back a few weeks in my posts you will see mention that dependent upon your location you can be from a few miles to a BT fibre node to a few hundred meters, effectively the national fibre network is there just needs the last bit of expansion.
Electronics, yup, but located in buildings in temperature and humidity controlled environment, with a clean power supply and back-up power. The core network has built in redundancy using rings of network so if one link fails it switches to another route, network diversity, ie ductwork from a building going in separate directions, so if the east duct is damaged the west is intact.
One issue to access to BT duct is that some of the old copper core cables are still in the ground as they cannot be bulled out as newer cables are so tightly wrapped around them it would damage the newer ones if the old is pulled out. That also will affect SPs putting there cable in a duct if it is defined as blocked, who will pick up the build cost of new duct. Also if a SP damages an existing BT cable while providing there own, then they will have to compensate BT for that damage and loss of services. Its very easy to say you can have access to BT duct etc, not so easy to do in the real world...
Openreach manage the telecoms infrastructure in the majority of the UK and as such hold a monopoly,. I believe OFCOM are opening up access to BT/Openreach ducts and poles, so what does this mean? It saves money on civils, like digging up roads etc. What doesn't it do? It doesn't change the fact that BT/Openreach still own those ducts and poles and there will be a rental cost for use of the infrastructure, including POP's, if the relevant parties don't build their own. BT/Openreach will make money no matter what. The third party, be it Sky, Virgin Media, or whoever will also have secondary costs with one of the biggest being customer service. I don't hear BT screaming about the regulatory changes being proposed, but there has been some kick back from 3rd party providers. COMCAST and Liberty can go into a partnership if they wish, to provide alternative FTTH and on the side and SKY can enter into a partnership with Virgin Media, but BT will then canvas OFCOM to loosen the regulatory shackles. I've read previously that Comcast and Liberty think they can avoid regulatory scrutiny by setting up an FTTH solution separate from SKY and Virgin and then allow SKY and Virgin access, circumventing regulatory oversight, well I say good luck with that, you'll need it.
As the virgin network grows will BT be able to use their network to provide faster bb. Source for the goose etc. Tricky one for Ofcom but I would expect the answer would be no as virgin will have assurances that it cannot happen otherwise their investment would dry up. How long before they become the dominant player with all the regulation that comes with that dubious honour.
Honestly it is a good sign
If it is true then the emerging regulatory framework for regional & rural areas is positive. Investment will be compensated through permissible pricing. Only a national network makes sense for Sky so it must be this, bells and whistles, not cities only
Clearly good for BT if it makes sense for Sky / Virgin to build, too
If not well then it’s not a problem then!
Cheers
NDN - sorry you miss my point. BT has to some how find full fibre and 5G. Can it be afforded?
Won’t one network eventually compete with the other (retail) ?
Will people pay more?
Will Bt be able to charge more?
Other operators offering 5G at no extra cost
Also fibre is not quite like that is it? There’s lots of electronics inbeteeen
NDN - sky won’t take their customers away from BT lines until there’s a Virgin option. Virgin now have access to 54% of the population & growing
Second point, Sky with Virgin, if that is the way they go then fine competition is good. If that is there intention for delivering FTTP for there services then unless they also have access as at present to the BT network they will lose customers. The Virgin network is limited to select locations at present and expanding it to new areas will take time and a lot of investment. As Sky intend to deliver more of there TV content via BB do you think they will want to loose customers because they do not have access to a national network, no, at worst they will run over both networks perhaps with a price bias towards those using Virgin.
Full fibre is a necessity, not risky at all as others have pointed out. A tie up between Sky / Virgin could obviously hurt BT's pockets. I did read an interview with the Openreach boss and he was quizzed on this potential tie up. He seemed unperturbed and welcomed the competition. That said, he's hardly going to say it's catastrophic news for BT. Time will tell.
Aus, firstly. How can full fibre be risky. As has been mentioned it is the best delivery method we currently have, look at the Far East, Thailand, Singapore, Hong Kong, etc relatively new networks utilise FTTP, same in a lot of Europe. Once it's in it just sits there as a passive network until we flash something down it, unless a human intervention takes place it doesn't go faulty like a matalic network, so very low future maintanence costs therefor allowing cost of services on it to reduce going forward. As I said there will then be cost savings on staff, tools, testers, vehicles etc, allowing costs to fall while still growing profit. What's not to like...
It won’t happen. Or maybe it starts and they build a few miles to scare everyone. Question is does it push a BT / open reach separation closer
More Reports of a virgin / SKY tie up we should read this as Liberty /Comcast.
This follows the removal of virgin mobile from EE
I see this as a obvious move and very damaging in terms of revenue loss and competition
https://www.google.co.uk/amp/s/www.proactiveinvestors.co.uk/companies/amp/news/911539
AW, Fleccy itsnot ridiculous to ask this question at all. I can see you are both very sure of your opinions but there are some obviously debate-able holes
B T has positioned itself into a place where 5G & FTTH have to be funded, it looks to me that 5G funding never stops, the combined funding for these looks like more than BT can safely fund
In both cases the funding model needs users to pay more, this business case isn’t clear to me
Will people pay more?
Will BT be allowed to charge other operators more?
Competition from companies who don’t fund FTTH are already offering 5G at no extra cost
The evidence for this is “we don’t have full fibre” in part because BT agrees with me.