Member Info for Aus3009

There isn’t a federal europe & there’s not going to be. It’s a ridiculous nonsense

Fleccy - well that would be full circle to what I was trying to describe earlier in the week. BT’s share pride rose on the potential of new tv revenues... it’s what’s needed, new revenue channels to replace old ones

I’ve been tracking the BT broadband failures last couple of days in absolute horror last couple of days. The bit I don’t understand about this news paper report for virgin failures is the failures are for between 2 and 10 minutes? That sounds like network maintenance or network nodes reorganising themselves to me.

Fleccy - except the rot set in long before Brexit or Covid. Do you need to rethink that explanation

‘‘Tis is all about revenue decline & feats around when it stops at a time when Bt needs to spend big imo.

I’d revenues were increasing the money wouldn’t matter.

Fleccy - stop your nonsense

The scenario I gave was BT losing a retail contract to another provider & that provider not needing to us any BT network

That’s zero income for BT. End of, no matter how much you don’t want it to be it is & that is simply a fact

Hey Nigco - lets start this off and straight away I don’t have a low opinion of BT. I’m trying to understand what’s going on and relate it to the share price and results.

Rather than just writing it off as market manipulation or bad press, my alternative view is there are reasons why the market prices BT (in my opinion ) low.

If I can understand what’s going on, I feel better assessing the risk & seeing the opportunities

I’m not fully convinced by some of Fleccy & NDN’s rationale & think there’s a bit more to this then they describe. I’m sure they are right about the fibre rollout technology wise, but I’m less convinced it’s a done deal on the business case side.

I inherited a load of shares from my dad & have invested a fair bit of my own cash in this share too.

The industry interests me.

Based on assets and previous SP I do think BT is undervalued, but my thinking that directly contradicts what the market thinks, do rather than being comfortable with my own opinion, I’m trying to see what the market sees & whether BT’s plan will get them out of this......,

NDN - yes churn, that’s a good description. Exactly what I am trying to describe. I realise you put a positive spin on the business coming back & I for one hope they do.

Fundamentally in a way in which I can understand it, is my explanation for what we are seeing in BT’s financial performance.

Revenue is going down because retail business income is “churning” and being replaced with

0 income if there’s an alternative network in that area

A small percentage of that income if the new retail owner chooses to wholesale / rent BT’s network

Alternatively the retail income is lost because the retail customer no longer wants the service (home phone for instance )

I’m thinking this reflects the results we see, reduced revenue. But with small variations in profit

A continued decline of revenue, will eventually lead to less profit

BT needs to keep paying its bills. So I’m thinking best thing BT can do is find alternatives for retail business to keep revenue up. EV charging, TV, TV sport, IoT alarms, smart homes etc etc

Those are my exact thoughts. A decking revenue leads to less money to make a profit from

I’m guessing cost cutting goes some way, but again there’s always limits and notoriously difficult to actually deliver without impacting revenue again. But again, without the new income, the cyst cutting is from a smaller cake, so if revenue falls enough, cost cutting can’t keep up

NDN - you’re like a bit. I don’t know if I can make this any simpler.

A retail contract priced at £55mln goes to BT. BT revenues £55m

5 years later, BT lose retail contract. If & it is if BT links are needed, BT replaced the £55m revenue with a fraction from wholesale rental

Hence, they still get income (maybe) but a fraction of their original retail deal

This impacts the bottom line.

I don’t know how to explain this point simpler & this is what goes on in the market, little by little, but by bit.

I know BT win contracts too, but it’s obviously not enough & I doubt many companies go back

This is why I’m hoping BT can find more retail services to sell

NDN - yes I’m wrong about C&W apologies. But you know what I mean, might be called Vodafone, buts it’s the old C&W networks and infrastructure taking the retail contracts away from BT’s bottom line.

Nigeco. - when I read about high data rates to homes, I get the impression it’s less about the consumer & more about being able to deliver that data rate to other things in the same street. 1gbt consumer broadband seems like the least necessary part of this upgrade

Do OFCOm regulate VM prices? I thought they only regulated BT’s, although are you saying because BT are forced to keep wholesale costs low, the market then forced virgins prices? I thought that was the whole idea? Apologies yes wrong about C&W

Fleccy - https://beta.companieshouse.gov.uk/company/03840884

Sorry NDN apologies

Fleccy - I’m not talking about anything more complicated than counting. Increased profit margin (awaiting delivery, may not happen) on lower revenue means less overall against more dept.

It’s pretty simple maths, halve revenue but increase margin & dept doesn’t necessarily work out as more profit.

NDN - C&W U.K. stopped existing in 2018. The services & networks it owned are still there, just incorporated in Vodafone now. I’m referring to this capability as C&W. Rather than Vodafone as in mobile. Correct me if I’m wrong, but coax is not limited to one service, there can transport multiple services not separated by different light colours (wavelengths ) but by different em (RF)frequencies, I believe cable companies broadcast tv, 1gbt broadband and voice across theirs.

Almost lastly, on this date I think virgin have more FFTP then BT does. Or at least it’s a close run thing

Lastly, I’m not portraying the BT network as worthless, I’m portraying it as not able to generate enough money to equal what it does now or 5 years ago when generating revenue from network activities + all its business and consumer retail revenue & that this retail revenue needs to be replaced with something else

NDN - FLECCY - We go round and round in circles again and again. I already know all these services need network of 1 kind or another. What I’m saying is BT’s service business is showing declining revenue because people either don’t want to use their service or because others also provide a service so they have a choice & BT needs to find services people do want to spend their money on. Increasingly I see network as the thin end of the wedge. People / companies will have other options (that’s just a fact). Even if those companies still rely on a bit of BT network, the conversation from retail to a tiny bit of wholesale income doesn’t work out well for BT’s bottom line. BT has to spend £20bln on upgrading it, this has to be clawed back. Owning the network but not the service is the thin end of the wedge, because retail generates more money than the wholesale. Slowly converting customers from retail and on the Bt network to wholesale but on the network or worse 1 wholesale charge for lots of old Bt retail customers (no more). I’ve heard your same old same old which entirely ignores this risk with Obfuscations about less maintenance costs or future proofness or that no matter what other companies have to use BT tails (which I still don’t accept & I know for a fact not to be true) but everything you say, just adds up to a diminished BT unless they can find things retail customers will pay them directly for, like BT sport for instance. If BT ends up wholesaling it’s network to resellers or over the top tv and service companies, it will end up being a fraction of its current self & maybe unable to service all that debt it needs to upgrade. Those are my thoughts, this is what I ponder & I don’t see any sensible answer yet. Even the revenue from emergency services is in decline, I know for example C&W have taken some of this business. This is why imo wholesale network isn’t enough

Hey Carrington - I agree in part, I see these shares as under valued too. For BT I think it needs to prove it can protect itself in a changing market. I think the jury is still out on that. My opinion is being the provider of network isn’t enough, it needs things people will spend money on. I still agree with the attempt to get into tv for example, BT sport I think is good but the “tv” offering still feels a bit half hearted. I like to send them getting into branded smart homes, but the ship I think has sailed. So that leaves questions about what will it be.? I have most of my money in this stock so my money is where my mouth is too, but changing work patterns, broadband competition, death of home phones etc etc etc are all leaving me concerned. I would have loved to see BT do a deal with Apple TV for instance to replace their set top box. Have to see.

Hey Carrington - based on low interest rates and low stock values I guess. Liberty (John malone) has never been shy about doing deals, mergers and acquisitions though, so much so this looks a bit like BAU to me. Although you’re proved more right than me by an increasing SP across this sector. Could also be a safer place for the coming doom. Unlike you I didn’t buy at 99p. Silly really, I was busy, hum Ed and harrrrrr’d but kept the money in my pocket..... it’s nice to see BT out performing Vodafone shares for a change too, but they have just paid dividends

Why would liberty buying assets in Europe create interest in U.K.? Might be Liberty spending in Europe might mean they are less likely to spend more than O2 buy in the U.K. ? . If that’s the theory not sure it’s correct because Liberty are not necessarily unhappy piling on debt

NDN - oh okay missed