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Hay Aus. When it comes to BT you are always “Allegro” eh...
"Fleccy - the problem with living in the past is you lose perspective"
I don't think I live in the past, I only left the Industry at the end of 2019 lol. BT own Openreach, and all the Ducts, Poles, Wayleaves, as well as the majority of the Fibre going forward. It isn't just the likes of Virgin, Vodafone, or Sky that are using Openreach offerings like PIA; Many councils are building their own PIA network infrastructure, to connect various entities within their areas, as an example. With Openreach offering PIA, it may eat into BT's traditional business, but it also pushes out the business for other providers. VM and BT will compete for wholesale Dark Fibre, and other business, but VM are behind BT in many parts of the country, and BT have always been a provider to big business, so well established. I'm sure VM will do well, but the combined revenue of VM and O2 doesn't currently come close to BT's, and BT are rolling out FTTP/5G at a rate of knots. BT/Openreach's strengths are either played down, or under estimated by the market imo.
Aus did you read the Vodafone response I linked to, it says it all.
"With a combined BT/EE the incentives for BT Openreach to commercially
supply dark fibre services for mobile backhaul and the incremental revenue
this would generate for BT Group is outweighed by the additional competitive
advantage the mobile division of BT, EE, enjoys as a result of being the only
operator with ‘owner economics’ in mobile backhaul services. EE can increase
backhaul capacity and network speed without incurring incremental external
costs. This is illustrated by the fact EE is already installing higher capacity
10Gbit/s backhaul capacity at each 5G network upgrade.
When Ofcom proposed dark fibre [CONFIDENTIAL], however when Openreach dark fibre was
withdrawn due to an appeal from BT we were forced to reconsider and
[CONFIDENTIAL]. The availability of Virgin dark fibre has again enabled us [CONFIDENTIAL].
This same supply side dynamic will be true for the merged Virgin and O2
business if this transaction occurs. An integrated mobile and fixed telecoms
operator has reduced incentives to supply fixed wholesale inputs to other
mobile operators on terms that will enable them to credibly compete"
https://assets.publishing.service.gov.uk/media/6035388dd3bf7f0ab70a4155/Vodafone_response_to_issues_statement_24.2.21.pdf
Fleccy - the problem with living in the past is you lose perspective
In the 90s the cable industry were nothing more than startups, SKY too wasn’t far short of a startup TV only company.
Mobile hadn’t undermined fixed line voice
It’s almost like you don’t understand the difference in revenue between BT owning a retail customer & BT only owning the wholesale relationship
& I’ve never said “destroy BT “ only compete with
"With the market up so high, BT can never restore your manhood. How many times have people asked you when BT would rebound."
H-hi, over the last 5 year period, the FTSE is only up 7%, compare that to the DAX up 44%, or the CAC40 up 31%, DOW up 84%, NASDAQ up 183%. When you describe the market as being high, it doesn't apply to all markets.
There are a couple of ways it can go, the US bubbles could burst with contagion to other markets, or the FTSE could play catch up. Since the FTSE has vastly underperformed other markets, there isn't much room for the FTSE to drop, the US market bursting would catastrophically destroy US investors.
Rod, fleccy,
With the market up so high, BT can never restore your manhood. How many times have people asked you when BT would rebound. Most depressing company/ sector ever. In the same boat but no holding hands and bareback stuff......lol
Haha Rod, I shed a tear reading your Bro-com monologue. I suspect many people remember the ridiculously slow transmission speed of the older fax machines, and the rubbish quality arriving at the far end. I don't hold any emotional attachment to BT, apart from the fact that it's one of the few remaining truly British companies.
I've seen all this before, viewed from the sharp end of the Telecom industry. In the early days I worked on a product called Smart Box, that sat at the customer sites between the PABX and the BT lines. Smart Box worked by capturing the tones, or pulses from the PABX, and inserting a number in front of national calls and routing to Mercury. The Smart box/131 access was eventually replaced by carrier pre-select, but Mercury grabbed a lot of the business and residential long distance voice traffic. Mercury produced their own branded telephone sockets and installed Telephone boxes in most city centres and Airports, Railway stations, etc. What's really changed? Instead of companies piggy backing on BT's telephone lines, for voice, they're using Openreach for providing Broadband services, soon they'll be using Openreach Fibre, or Infrastructure. So basically it's similar to the 90's, just using different products. In the 90's BT owned the telephone lines other companies used, since they still own all the infrastructure, not much has changed. As far as VM are concerned, the cable companies were around in the 90's too, and things didn't go well for them then.
"Because BT has been so dominant for so many years, these companies, along with Vodafone naturally seem themselves as BT’s competition, for the first time, they are not far off being able to seriously compete / impact / eat into BT’s market share / dominance."
I used to think like that, in my many years working for Mercury, which was owned as a subsidiary of C&W, then the Mercury brand was dropped and we were simply C&W, and finishing my career working for Vodafone after they took over Cable & Wireless Worldwide. Oops should I have shared all that?
What I subsequently learned, was that BT shouldn't be easily written off. I remember Nynex UK being in the next building when they went bust, and were taken over by C&W, and being tasked with teaching the Cable TV Engineers about PDH transmission. I remember C&W selling the Cable companies to NTL, and Cable & Wireless eventually splitting into two, before both entities eventually being taken over. For over 30 years I've heard, and read that BT will be wiped out by various companies and look they're still here and going strong.
You say that other companies "are not far off being able to seriously compete / impact / eat into BT’s market share / dominance", but this is all deja vu as far as I'm concerned.
How many of these new providers will be around in 10 years? Next to none imo. Many will be mopped up and consolidated into larger entities with probably three or four players left, BT will be one of them, VM/02 will likely be another, with maybe Vodafone taking another spot. Much of the media, and some of the posters on here seem to think that BT will simply get wiped out by competition, which is a ridiculous opinion. Sometimes competition between a few big players can be good for all, and BT will remain the biggest player in the UK.
Aus, if this is to believed and I don’t doubt your insight, then put simply the level playing field between BT and it’s competitors has reached parity. Time for OFCOM to release the shackles and allow market forces to provide value for the customer, through investment and fair rates of return.
Fleccy you know my logic too well.
My opinion is
Sky, Liberty & Comcast are disrupters, anti incumbent by nature. It is in Comcast’s DNA to fight incumbents, BT will likely be viewed the same way, not as a partner.
American cable kings are wedded to cable technology by nature. Cable is a religion to these people, not a preference.
John Malone is a deal maker, he wants back into the us cable industry, for reasons above, part of why he sold up in Europe. John Malone & BT’s methods couldn’t be more different. Sky’s latest CEO is the ex COO of Virgin Media, a protege of John Malone from previous cable ventures
Sky needs to get away from satellites, they need to become a cable company (in comes Comcast). Comcast will look for Cable options by nature, they will over pay, wait or do what ever is necessary to promote a cable options, over and above any consideration, even without logic, this is a company who makes $100bln from cable, it’s a religion
It doesn’t matter how many times you say it, Virgin don’t need to use BT network options for the majority of U.K. homes & is increasing by the week. Customer Numbers increasing, O2 is coming on board, O2 already have SKY mobile.
Because BT has been so dominant for so many years, these companies, along with Vodafone naturally seem themselves as BT’s competition, for the first time, they are not far off being able to seriously compete / impact / eat into BT’s market share / dominance.
All my own opinion.
"but all three independently or together are on the opposite side to BT"
Aus I'm interested in your analysis into why VM/Liberty Global have more in common with SKY than BT?
Malone and Brian Roberts may be buddies, but that means little in the business world, in fact my read is that they are competitive with each other, a bit like the Ambani brothers in India.
A fly in the ointment for your theory, is SKY's commitment to using Openreach FTTP to provide service.
SKY is primarily a TV service provider, and competes with BT's TV/Sports channels, and on the broadband side with each having their own offerings over Openreach. Virgin Media are primarily a TV/Internet provider, using their own cable infrastructure, and directly competing with SKY as a media broadcaster. There are reasons why OFCOM and the Competition Markets Authority could reject mergers in both cases, so it's unlikely they'll try, but it would be nice to see an attempt. Another possibility is partnership through sharing Fibre infrastructure, and there are a couple of ways that could happen; One way is for SKY to go into partnership with Liberty Fibre, and share the cost of building new infrastructure, probably using Openreach PIA products. Another possibility is that BT and SKY could go into partnership, and SKY buy a large stake in Openreach, which shouldn't be a competition issue. Either, or neither of these possibilities may happen, but the Openreach stake would be the most interesting for SKY, and the most likely in my opinion.
In this 2018 video, Malone implied that Roberts overpaid for SKY, but also suggested that SKY needs to transition from satellite to Internet. It will be interesting to see how all this unfolds over time.
https://www.youtube.com/watch?v=oqFBbMDr05k
Hi Larry - yes, sky Comcast, Liberty media are not necessarily fully linked up yet, but all three independently or together are on the opposite side to BT. You can add Vodafone into that mix too, all have far more in common than they do with BT in my opinion
Ideal time for someone to merger or try a takeover
Part of either deal they can place their own chairman
Aus, I think so but Sky is also owned by Comcast so no less difficult or easier.
Hi Aus, Liberty Global own 9.9% of ITV. Not sure about Channel 5.
Its trading off 6x forward earnings - they just need to show they can grow the bottom line again and the ship will turn
Larry - Doesn’t Liberty Media already own a large slice of ITV? & 5 I think ?
BT Sport, still a paid for service of course.
Possibly a C4 or ITV would suit more and not be a challenge to the mergers and acquisitions. Merger with Sky takes a large telecoms competitor out of the market. ITV gives BT a platform for BT Sport, entertainment and doesn’t challenge the lessoning of market competitors.
Sky merger would interesting to watch unfold