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Momentum building?

JP Morgan Cazenove 300p today .

FTSE down 2.4% BT down 0.5% ….unheard of!

Would a little optimism be unreasonable?

Well Over £80million in off book trades today.

Funny, it’s on Morningstar which is normally accurate.

The real point of course is that none of them know and the optimists are no more reliable than the eternal pessimistic ones like DB and UBS.

Just read the Reuters report. It makes it sound as though BT’s roll out that’s heading towards 30m homes is all due to the wise actions of OFCOM.

Nothing to do with BT then! The board must be waiting for OFCOM to chip in a few quid as it was all their idea. 🤣🤣🤣🤣🤣🤣

Am I alone in wondering why OFCOM has continued the cap for five more years to encourage competition. Doesn’t the plethora of altnets fighting and often failing to gain share ,because of their business model not BT, show that constraint of the dominant player doesn’t magically make a vibrant competitive market.

Would like to hear the views of some of the deeper experienced thinkers on this.

Early market reaction neutral to positive but what next?

Somebody likes it…..Goldman Sachs 330.

The mystery is that it’s the same share that Deutsche rate at 150.

Nobody knows , so much for experts.

Shouldn’t as largely UK revenues but going down with FTSE and a bit more. 200 seems to have steady resistance so far but at the end of the day who knows??

Of course that’s true but do run some revenue/ profit scenarios for a few years out and the story seems to hold up unless revenue falls off a cliff which seems unlikely.

I learnt that way to test business strategies running businesses, perhaps I should have gone to school too 😉

The old saying is still true:

Revenue is vanity Profit is sanity

As discussed before there are probably security reasons that would prevent a takeover of BT. If the increasing competition reduces their dominance in the UK is there a point when it would be acceptable for a takeover to take place?

Fleccy, thanks. I asked the same questions on ChatGPT then did supplemental questions on overbuild/ consolidation and profitability /debt financing / equity investment and it looks like it’s a complex integration exercise and unlikely to be profitable for sometime.it’s a brave punt on longish term infrastructure investment. It surely could undermine Openreach business but they’ve probably got a couple of years to,get their ducks lined up to deal with e competition IF OFCOM allow them to. Interesting that so much money is being invested in confidence that they can be successful in stealing BT’s lunch ( far from certain) yet BT is undervalued because so many think they’ll be successful in their efforts to do so.Doesn’t make sense to me from a risk/reward perspective as it gives credit to a largely unknown and yet to be integrated management that they will beat the incumbent .Hope Mittal and the new management line up are aggressive in their response.

Snoopz, interested to hear why you believe that. I would say the price tag seems high for loss making debt heavy companies. Can’t see how another £3.5 billion investment would pass any reasonable financial justification process .

Probably due to the big buyout deals announced by vodafone and virgin. More altnet competition.

Time for OFCOM to allow BT to compete.

Interesting how it followed a tree shake just a few days ago that knocked price sub £2.

Amazing how a ftse 100 share is gamed by the institutional investors so often and they continue to get away with it.

I’d say mid term when their promised hike in fcf and bottom line improvements show up after roll out and cost reductions. Shorter term …….. when they half the volume of connection loses if OFCOM let them compete.

In the media discussion about customer loses there never seems to be much recognition of the fact that of the almost 30 million broadband lines in place in the UK a third are still BT direct and another third are BT through other ISPs. After the massive investments by competitors in recent years a loss of 850 k in a year and reducing is quite a success. Of course 850 up would be better but another measure of a businesses ability to succeed long term is its willingness to respond to new challenges to protect its future and shareholder value. BT lost the plot on that for a while but under AK and with the pushing from Mittal they seem to have solid plans for the future. Altnet experiment hasn’t been a big success and BT isn’t going anywhere but to improving FCF and profit. If the government come through with 1.5 million new homes in this parliament BT will grow.

I think Bharti et al know best . I’d say initial drop on headline line drops but close the day up as better things sink in.

It’s arguable that with overbuild at the levels it is and the funding model used by all the altnets that they would ever work at the scale they are. This is despite BT being hobbled by regulation and effectively subsidising the competition by forced access their infrastructure for altnets.

This is a failure by government and even more by OFCOM.

Government being what it is they’ll be blaming everyone else.

Laying off a third of their workforce. Telegraph today.

Interesting article thanks. So it says The taxpayer backed National Wealth fund is exposed by a quarter billion pounds it guaranteed if they go bust. The government fund OFCOM to regulate BT and cramp their competitiveness and simultaneously fund their competitors. Doesn’t seem right surprised that it’s not been an issue that BT was vocal about.