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I’m afraid to say I did have some spare cash but decided not to buy BT shares below £1...... that was silly & the first time I’ve not bought on the way down. Just goes to show. But we’ll done to everyone who has lowered their average or made 8% today
Cricky when I saw the numbers first thing I thought they were pretty good, then I’ve been busy all day, came back and see this carnage? I’m bit bewildered & no spare time. Hoping for a hand up? Has anything else popped out in the news this morning & was the pension deficit confirmed / mentioned? Tia
NDN - yes I can see potential of 5G & capacity needed. You confirm my thoughts on the fixed broadband income regardless of usage. Fibre optic networks obviously still have electrical equipments attached, so on the same basis trusted pair or coax doesn’t really fail unless someone cuts it, but I agree there is potential for fibre to be more reliable, certainly in the short term. (Might want to read up on rotting fibre during the energies days). So I can see a potential to increase revenue through 5G, very little chance through retail bb and potentially lower wholesale or at best very low fixed income from wholesale. So £18bln for full fibre & 5 to 10$bln for 5G..... where is the pay back coming from? Obviously servicing dept eats into profit to. I’m not saying this can’t be worked around, I’m saying these questions are not being answered or addressed. The message is revenue will continue to decline, costs and dept will increase..... but we will have fibre and 5G? I want to know where and how these networks will be leveraged to create income & every time I think about this I see over the top providers benefiting more than the network provider in this case Bt
NDN - I think you explained it ok, it’s just not a compelling story. Invest £18bln in a new network that will revenue less money (discounts, reduced connections etc) & hope you can save a few quid with less maintenance & fewer buildings. I’m guessing there’s also a cost to reduce the work force. I’d much rather see an investment that’s going to increase the top line otherwise what’s the point. It might be that investment is just about trying to maintain business & offer similar connectivity to its network competitor who is already capable of delivering 1gbt connections to over half the country. The point I’m making is for BT to make more money, they have to be selling / creating the services and content people will be buying. Fixed rental prices for a network connection means they will miss out on the telecoms boom you are predicting. The telecoms boom looks like it’s mainly a cost to Bt rather than an earner. (Cost of fibre rollout & 5G ). It’s too late now & competitors have made it impossible, but for a network supplier to make more money, the model needed to be metered, where consumers and business pay for what they use, otherwise it’s all huge costs the the network provider with very little benefit. Reducing staff and buildings is cost saving not revenue generation. As we all know the value of money declines over time, so reduced incomes don’t make for a good business plan. As a BT investor, I don’t care about all the new fabulous services other companies will be sending down BT fibres, because once they pay their fixed price for that connection, the more services they sell, doesn’t make Bt any money !!!!
NDN - I think what you are describing is the problem, not the answer. BT get to charge a fixed cost for the hose pipe connection, regardless of the usage, which they have to upgrade/cater for with a bigger backbone etc, etc. There’s no extra money, for the extra network. What I think you are saying is, in the future a fibre network will be cheaper to run.... I’m not sure it’s as much less as you think to be honest, but we do know it’s going to need circa £20bln of investment to get there first. Obviously being able to take different services from different providers and over the top providers is already possible and not linked at all to fibre connectivity or coloured light. So the worry is still there, how does Bt increase revenue from a fixed price, as much as you can eat network provider model ? I can see they might increase margin after a £20bln spend (maybe)
Hi NDN what I’m referring to is the capacity and other maintenance costs. I don’t believe BT haven’t needed to add capacity at cost to manage the extra use, but whether the cost is now or over provisioned before, it’s still cost. BUT the main point I was making that the business model of a network provider is such that I can’t see significant extra revenue running alongside the extra use....
ICL - part of what you say forms part of my concern around being a network provider rather than a service provider. With all the working from home, I don’t fully understand why/how BT can generate more revenue, home workers carry on paying the same per month for their connection, regardless of increased use. BT on the other hand have all kinds of extra expense keeping the network going. Company’s providing an over the top service, conference, tv etc etc they see increase of income.
Millie - it will come down to price. The EU sets Minimum standards For good bought, sold and produced within their / our market place, this way every consumer / buyer knows what they are getting & everyone operating within that market has a level
Playing field, ie they can’t produce and sell things in that market which undercut other producers by producing inferior products. This means for example we can treat animals okay & farmers can charge a fair price to do that & so on. The U.K. exceeds nearly all these EU standards, so our farmers get subsides to encourage higher and higher standards consumers across Europe can benefit from. After the trade deal, American chicken with such poor animal welfare standards, so toxic it needs to be bleached before it can be safely considered by humans will be cheap. It doesn’t take a rocket scientist to work out what happens to the U.K. farmers, same for GM same for steroid beef & rat poo rice and poisonous peanut butter, etc etc etc. It makes me laugh when dishonest people sell the EU as a protection racket, protecting european producers and manufacturers. Stupid people don’t realise British people and British jobs are european producers and manufacturers.
Anyway back to BT. I still fear trade negotiations with America will involve American business. Getting unequal access to the U.K. telecoms market at a time where there’s much money to be made.... but like the early nineties when Maggie’s government tied down BT to give American CATV companies time to build & hide their domestic issues with U.K. investment depts.... same thing, history repeating.
C3PO - Ericsson I would guess will stand to pickup most of the lost Huawei business in U.K. (is my guess). Nokia can do (I think THREE ) have it, Samsung is another big supplier (states) & of course couple of American telecoms stalwarts can deliver these opinions
Going large. I have to laugh at your comments about “not having big economies to trade with”. It’s almost like you think the U.K. doesn’t already trade with the big economies. They already buy what the want from us, a rubbish trade with America just means they will import nasties into the U.K. which currently they can’t. Same for Australia, same for Nee Zealand. There’s nothing in it for the U.K. only benefit Will be to the low standards awful producers now able to hick their produce into the U.K. market
Debs - I think those comments only scratch the surface of where you need to be to form an opinion.
It’s not just the Ex Australian prime minister is it?
As I said chicken is tip of iceberg but to understand the problem you need understand a whole lot more than consumers, which in its own right is questionable, as consumer will buy cheap, these actions will destroy U.K. chicken producers, same for beef etc etc
Also affects U.K. producers of food, pies, pasties, TV dinners etc etc etc will have to prove there is no chance their products are tainted with poor quality meat or GM fruit or veg.
The organisation, tracking and overheads to do this are ridiculous, if they don’t use cheap ingredients for the U.K. market. Other countries producers will, meaning U.K. producers will have to match their prices, whilst maintaining exports into Europe without.... its an impossible business model. Just look at the damage to our food industry same thing applies to almost every area of business, transport costs through borders, data protection, standards for electrical safety, fire on and on and on
Hey NDN I hope you are right. I really do but there are fundamental truths. I don’t think the lack of trump will change much from the us perspective, they will be looking for new markets & opportunities, we all know EU standards and size protects us from chicken that’s so toxic, it needs to be bleached to make it fit for consumption, but that’s the top of an iceberg. Similar pressures will still exist, drugs companies, farmers and telecoms firms in state will still apply pressure
The other imponderable is, what do all these other countries expect to buy from the U.K. that they don’t already buy from us? I listened to the ex Australian prime minister laughing at our lunacy saying just that, a new trade deal has a small opportunity for Australian companies but nothing for U.K. ones