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News today regarding the speeding up of FTTP rollout is another good reason to buy, hold BT shares. At present Broadband, and other legacy products are delivered mostly over a Copper local network from the exchange. This network has inherent issues affecting reliability and speed, some of which are, corrosion due to moisture, interference from other products using the same cable, mixing copper and aluminium in the same route and many other physical and electrical issues. Once more and more services are delivered over a wholly Fibre network 99% of those issues disappear, the result being a far more reliable network meaning less people to manage it. Reductions in staff and there associated costs will then follow helping to improve the bottom line in regard to local network products. One of Its biggest day to day running costs is network maintenance once that can be removed income can be directed into other areas to increase income or develop new revenue streams. As long as Boris is prepared to assist as he has indicated then this share will see some very good return in the next 2-5 years, and a dividend.
Missing the point LT, still take dividends during that time...
Some good info there for posters / readers that are not aware of those additional benefits of moving to FTTP. This in combination with looser regulation should see us much more profitable in the future. The market appears to be punishing BT for investing in its future. Its not like its investing and wont be rewarded in the end, there will be more people than ever using Fibre and Mobiles.
I keep seeing estimates of £18bln to deliver full fibre. I’m not sure about that level of investment / debt.
Reminds me of tale where land owners planted oak trees to sell to the navy for new boats. Ship manufacture moved on to steel and then aluminium long before the great oaks were great
I still view full fibre as a risky move, but like 5G unless people are going to pay a lot more for it ......
Full fibre risky? Don't be ridiculous.
"Reminds me of tale where land owners planted oak trees to sell to the navy for new boats. Ship manufacture moved on to steel and then aluminium long before the great oaks were great "
Well there is no substitute for fibre, unless quantum mechanics takes some sort of leap forward and "sub space" becomes an option. Again 5G is about as good as it gets for mobile. 6G is mentioned, but it will be more akin to WiFi as it will use the top end of the Extremely High Frequency Band and the bottom of the Far Infrared band and will really only be useful in places like Football stadiums, Railway Stations, shopping centres, etc. It will be a long time before 5G and FTTP becomes outdated, if ever, as the technology is reaching the limit of our current mastery of physics. So after 5G and FTTP there wont be any miraculous leap forward, that requires a step leap in network hierarchy, just a slight evolutionary shift forward. The new thing will be utilising the new tech and the coverage 5G will provide, i'm talking driverless car technology, pilotless drones, everything going IOT. What i'm saying is that i don't expect things to change much in Telecom world, after FTTP and 5G, for generations. New applications will come along and bandwidth will improve with increased coverage, but I believe that this latest network step will be that last big leap, so network build costs will drop dramatically.
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.
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
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
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...
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.
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.
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
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
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
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.
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.
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...
"...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.
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.
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."
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.
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.
You used the word "guessing" Aus. Says it all.
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