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At present if a customer changes BB provider on a copper or FTTC service then BT have to convert the service in the local exchange, so a cost to BT, the same for the ISP to have there hardware sent to the customer, a cost to the ISP. BT then receive revenue From the ISP but have the cost of maintaining the copper element of the service should if go faulty which is inherent in the copper network, so some of BTs revenue goes towards that cost should it go faulty, which compared to other delivery methods is reasonably likely in a given time frame.
With FTTP, when fully rolled out, it is in theory possible to deliver all ISPs wavelength to every premises in the UK all the time, weather the end user uses, A or B or C etc. In other words with the right kit on the end it will work to whichever ISP you use or change to, as all ISPs would be present at the end of every fibre. So no cost to BT to change ISP at the exchange, a saving, but a cost to the ISP to send the kit out, almost no maintenance costs to BT to have to cover as fibre is far more resilient, so another saving for BT. All this also means a reduction in staff numbers in BT, a saving, and a lower wage bill as many of the staff used would be at the lower end of the pay scale compared to now.
That’s just residential BB not to mention all the other services mentioned earlier will also see a reduction in costs hence a chance for more profit. Service providers will still have costs to cover for each service, BT could well be in a position where they just have the income from SPs and very little costs if they only have to provide the glass in the ground and no hardware...
NDN this conversation isn’t about short term prospects, we are discussing medium to long term pressures and trends rather than 1 off exceptional trading environments. But if we were talking short term then BT should ride this wave better than most. Still leave the overriding question of how will BT Generate new money. How are they going to generate rising income online with the companies who will leverage their network. On one side it’s the likes of talk talk who operate with so low costs it limits what Bt can charge to stay competitive, whilst on the other side we have over the top services who drive Drive BT’s out going expenses without generating income in relation to the increased use
True Aus. But, there a lot of UK blue chip companies that at present have little or no revenue. How are they going to look at the end of the year revenue wise compared to the telecom network companies, and others that CV19 is not having an impact on at present. In the last few weeks we have seen, airlines, travel companies, car makers, leisure and hospitality and other sectors in a position to lay off staff and seek new rental deals to survive.
"Fleccy £22bln & declining year on year"
At the moment yes, but with Net profit increasing and i'd suggest that there's a limit that revenue wont drop below, although i have no idea what level that might occur at.
Fleccy £22bln & declining year on year......
"Netflix makes the money because they can use BTs infrastructure for their needs in return bt gets some alms."
Companies like Netflix do have network costs and are at risk of Network providers throttling their streaming services, irrespective of Net Neutrality. I also think you underestimate the UK core capacity and will also find that bottlenecks don't occur on the Core, but on intercontinental and subsea links for content providers who don't lease their own capacity. BT pull in £22 Billion a year in revenue, does that seem like a company that "provide the infrastructure for more or less free"?
Businesses that get get the best bandwidth capability are the ones that pay for it and with Quality of Service capability monetised over the networks, it's easy to see that content providers don't get a free ride.
Why should they do well ? They are just the modern slaves that are there to provide the infrastructure for more or less free. This is politically intended as it is the basis for the e-commerce and economy.
Netflix makes the money because they can use BTs infrastructure for their needs in return bt gets some alms. Same with any other business like iot, e-commerce and so on. Government wants that the infrastructure is available at lowest cost possible which is good for the economy in general but leaves the telcos doomed to bleed out over the time.
ThJones, your completely wrong in your view. Telecoms are one of the industries that are guaranteed to do well in the future. You come across as desperate to reinforce your view and suggesting that Telecoms companies are in a death spiral is just ridiculous.
Yes 6G is far away, but 4G was also far away when BT invested tens of billions in 3G to pay for infrastructure and frequency auctions. Same with 5G later on.
Fact is that the Telcos are in a death spiral of huge investments on technology, collapsing prices on all fronts, political pressure and regulation and short technology cycles.
The cost for 3G and 4G has caused the stockprice to collapse, the cost for 5G has caused the dividend to be cancelled till kingdom come, and 6G will cause the company to be nationalized again.
"Millimeter-wave 5G will never scale beyond dense urban areas, T-Mobile says"
"You are not right unfortunately. 6G will provide download rates of 1TB/second. And politicians will force BT to provide 6G area-wide, if it makes sence or not does not make a difference. Its a political thing not a economical this is BTs issue."
ThJones to get terrabit transmission you need to use mm wave, or even lower Wavelengths, Frequency is inversely proportional to Wavelength, so the lower the wavelength the higher the Frequency. The truth is 6G will be at the lower Wavelengths of the mm wave range, so will primarily be used for indoor high population areas and possibly open air stadiums and events like Glastonbury. If you're in your house, you will use the lower frequency 5G service, or a micro cell connected to your WiFi.
"mmWave doesn’t penetrate walls
This is perhaps the most common issue cited with upcoming 5G networks and it’s true to some extent. Most building materials, such as cement and brick, attenuate and reflect very high-frequency signals with a big enough loss you’re unlikely to receive a very useful signal moving from inside to outside. Even the air produces signal loss, which limits frequencies above 28GHz to about a kilometer anyway. Wood and glass attenuate high-frequency signals to a smaller degree, so you’ll likely still be able to use 5G mmWave next to a window."
I used to work on point to point microwave links at 13, 23, and 50Ghz, so i know the effects obstacles and atmospheric conditions have on high Frequency signals.
Thjones. We are a long way off 6g, the rollout of 5g is only just underway, will probably take another 3-5 years before full UK coverage is in place. 6g if it arrives in the current theoretical model is at least 10 years away from real world trials. In the meantime this model ma well change adding time perhaps to any rollout. Talking about the impact of 6g now is pointless unless it is in regard to the theory of the model, it at present has no relation to how BT, or any other network owners, share price acts. There are still locations in the UK that have only just got 4g, a good 7-8 years after the start of its rollout...
ThJones, I agree you make a valid point about the relationship between BT, Ofcom and the government with regard to the SP. The only way that the SP can realise it's true potential is if BT is treated more favourably, especially as it's supposed to have been a private enterprise since 1984. Other companies have had considerable help from the goverment via Ofcom over the years. This now needs to be relaxed to allow a level playing field. But as I have said before don't expect anything from Boris and his bunch of sheep. Incompetant does not do them justice!
You are not right unfortunately.
6G will provide download rates of 1TB/second. And politicians will force BT to provide 6G area-wide, if it makes sence or not does not make a difference. Its a political thing not a economical this is BTs issue.
"Leased line ( private services ) for secure networks for companies, secure connectivity For emergency services government and military, broadcast networks for TV and radio, network management for energy providers."
Indeed, business practises are changing now and most businesses are outsourcing their I.T. infrastructure to the cloud. They still need links, but instead of interconnecting premises, the links feed into server farms with applications running on the cloud, which also allows more home working using secure VPN. The market seems to ignore the business side of things though and just focus on residential. The narrative will change big time, i'm just going to sit and wait.
"Now they invest billions on 5G, but instead of then earning money on this it will be old worthless stuff and politicians will force BT to invest heavily on 6G."
It's all hype around 6G, 6G will complement 5G not replace it. People should read up on the technology and not buy into the market hype. As i've mentioned in previous posts, 6G is likely to use mm wave and Far-Infrared, meaning that it will mainly be used in line of sight, high bandwidth, covered areas like shopping centres, Railway stations, etc. 6G wont replace 5G it will be like Wifi for shopping centres.
Two dimensional thinking, only considering broadband and mobile based products. BT has many other income streams that together generate far more income than the above. Leased line ( private services ) for secure networks for companies, secure connectivity For emergency services government and military, broadcast networks for TV and radio, network management for energy providers. As said the margin for third party providers is thin and without the competition rules in there favour from OFCOM many would no longer exist. The income may appear not to grow much year on year but the profit dose and will increase as more fibre connectivity is in place for broadband as its maintenance costs reduce as time goes by, but you will have many companies sending there data down the same price of glass, therefor not revenue from one source as at present for copper but from many. Simmpels...
They are unable to generate profits as they are still seen as state companies. So their duty is to provide infrastructure thats it. They are politically not allowed to make profit, this is why they are regulated to the bottom. All 3rd party providers that rely on BTs network are using it for a steal. It is politically intended to keep prices low !
Therefore the BT sp will continue to go down, its a natural law.
Also on the whole 5G thing they will not be allowed to earn money on. State wants a good infrastructure so BT gets forced to build it, politiciants want low prices so BT gets forced to deliver the service for a steal.
The other problem is that there is also no real asset due to technology advancing so fast. All investments on 3G and 4G are writeoffs.
Now they invest billions on 5G, but instead of then earning money on this it will be old worthless stuff and politicians will force BT to invest heavily on 6G.
"Competition has caused this where non telecom companies whose core business isn’t the network"
I assume you're talking about the likes of Talk Talk and ZEN who rely on other network providers to supply their service? The problem for companies, who lease network and charge directly to their customers, is that they are going to be weighed down by wafer thin margins.
I don't follow Talk Talk as a stock, but what are their cost responsibilities?
They have to pay a wholesale cost for the network they use to BT/Openreach or whoever.
They have to provide customer service and call centres are expensive.
They have to compete aggressively on price, as they need high market share to finance costs.
All they own are their customers and their customers are their only source of revenue.
You can see where i'm going with this, network providers get a cut of 3rd party providers profits, without the overhead costs like call centres, etc. Network providers might have upfront costs of installing and maintaining networks. but once it's in it just prints money for the network owners.
As far as network traffic, there's more to the network than the local access and the likes of BT and Vodafone have massive capacity on their core networks and bottlenecks are more likely on submarine cable capacity interconnecting the globe. Another thing, Network hierarchy is scalable, so things like DWDM transmission links can can be scaled up by easily adding more wavelengths. Ip cloud networks are also easily scaled up with IP over DWDM functionality and Network build is a lot cheaper than it was 20 years ago.
All in all, I prefer the likes of BT and Vodafone over Talk Talk, but the market seems to currently ignore the risks associated with these providers who live off the back of the network owners. I would say the FTTP and 5G rollout presents a significant risk to the business model of these 3rd party providers.
The usefulness of telecom companies and their networks is without question. But that conclusion is not the answer to the question. The question is how do telecoms generate better returns? The industry has painted itself into a corner, users are using more and more, which costs operators lots and lots of money, but they charge a single “as much as you can eat” charge. Competition has caused this where non telecom companies whose core business isn’t the network so they compete on the “as much as you can eat” cost, which gets Lower and lower, which BT as a network provider & competitor in this market have to compete with. So the question is how will telecoms operators fund their increasing network costs from very low “as much v as you can eat” incomes?
"The world already can't operate without Telecoms, in 5 years with IOT and connected services, telecoms will dominate every aspect of life and that tells me that telecom has value way beyond what the market currently indicates."
Well said Fleecy
"BUT I AM pretty sure the SP is about to turn south and head for sub 100. I've just got this feeling after looking at the recent patterns; I'm pretty sure about that"
Charts might have been useful when most trades were done by humans, but the algo's now dominate the market, so how can a chart predict what a multitude of computer programs will do? I know many will disagree, but the big players can program algo's to fix any stock around any price they want, all they probably need to do is enter the price on a computer screen and let the algo's work their magic by letting the big buys go through immediately and making lots of small sell trades to drive the price down. BT's price wont go up until the power brokers decide to take their foot off the stock and only they know what might initiate that.
Brexit and Huawei is probably having an effect on sentiment and causing some of the downward pressure. The Q1 results on the 31st July is what I've got my eye on, if the results are good then we may see a change of narrative. Unlike you guys, i'm not interested in short term trades, but I am interested in where BT, Vodafone and Telecoms in general will be in 5 years time. The world already can't operate without Telecoms, in 5 years with IOT and connected services, telecoms will dominate every aspect of life and that tells me that telecom has value way beyond what the market currently indicates.
‘Short term trend still very, very, bullish - ‘
Only if you’re living in an alternative reality is BT very ‘very bullish’
Any idiot can tell you that the ftse 100 has gone on a record breaking 600 point rally and BT is about the only share in the entire index that has fallen!
How can that be - very very very very very bullish?
I’d describe it as being extremely bearish
Extremely in this instance being equivalent to 20 verys.
You really are hapless, not only at predictions, but at evaluating the past and present when all the data is laid out bare in front of you.
You wrote pages and pages of trash predicting BT would pay the dividend in full along with evidence to support your claim. And then what happened?
One thing I’ve learnt from reading your predictions is that whatever you predict I can be sure the polar opposite will happen.
" Velo: are you still in or have you sold up? "
Still in, still holding, hardup.
It's been an interesting experiment as yet still inconclusive in that it is my contention it has been possible to make a constant profit in BT (over 5 years) despite 5 years of a non-stop bearish long term down trend .
What I've picked up watching BT's price action over the years, is that money can be made from BT's shares in 3 ways, by-
b) To a lesser extent Overboughts
c) Going long or short as the Short term trend indicates (only the short term trend nothing else).
- Just so long as you jump out of the way smartly when that short term trend begins termination and changes trend. No dithering.
( For longer term investing then the short term trends are useless and ONLY the long term trends should be used and nothing else )
And there's my first sign tonight (see below) The Ultra Short Term Trend has now gone AWOL and confirmed it' has now turned BEARISH.
I said only the 'short term trend' and as that is still bullish I'm still holding.
Pretty sure it to will do a runner and skedaddle like it's younger sibling - but therein lies guaranteed failure. Giving in to "feelings and guesses" so "pretty sure" isn't good enough.
What I'm really concerned about is that tonight I'm "pretty sure" the SP is going for that pattern completion I mentioned previously and is going to form a new low. And as the previous low was 100/101-intraday to 99, then it most likely will be lower than that, and sub-100 to form a new lower low!
Now that's a 'pretty sure' feeling, even if I think it's reasoned. But when you measure a lifetime of my pretty sure feelings v trend line reveals - I lose out by a huge margin. So I'm taking this to the bitter end, as the short trend could do a kiss and a bounce away - even though I'm pretty sure it'll do no such thing. There is no room for gut feelings in this. The strategy is you do what the trend lines tell you to do, nothing else - and thank them too!
So, I'm holding because that's what the bullish short term trend line is saying I should do - and they've got good form; I have none when it comes to relying on "feelings" and "pretty sure's"
- BUT I AM pretty sure the SP is about to turn south and head for sub 100. I've just got this feeling after looking at the recent patterns; I'm pretty sure about that.
BT was up to yesterday -
Price to 200 day ma trend . .= Bearish!
Long term trends . . . . . . . .= Bearish
Medium term trends . . . . . = Bearish
Short term trends . . . . . . . = BULLISH
BUT TONIGHT IS -
Price to 200 day ma trend . .= Bearish!
Long term trends . . . . . . . .= Bearish
Medium term trends . . . . . = Bearish
Short term trends . . . . . . . = BULLISH
Ultra-short term trends . . . = Bearish
Velo: are you still in or have you sold up?