Member Info for fleccy

"Don’t you think it might be a way to amass vast amounts of debt / investment safely?"

You'll have to explain that to me, debt where and by how much?

As far as the future of wholesale and CP's, I suspect the ISP's will use whoever provides the cheapest and best service. If VMO2 can offer a wholesale service cheaper than the others, then they'll do well, the problem for CityFibre and VMO2 is that Openreach have a huge head start. PON is cheaper to run as it removes the need for powered street cabinets with batteries, and also removes the need to offer separate services over different technologies. As I pointed out previously VMO2 will have to retire their DOCSIS network asap, otherwise they'll have the added cost of running two parallel networks based on different technologies. Although BT will have to run some areas on FTTC for a while, post PSTN switch off, I expect they'll quickly force any remaining FTTC customers onto FTTP.

I was thinking about why VMO2 are administratively splitting off their access network into NetCo and it's occurred to me that they might be considering the option of selling NetCo at some point in the future. Openreach is basically a infrastructure management company with BT still owning the infrastructure, it'll be interesting to see how VMO2 structures NetCo.

I would think they'll strip out everything no longer needed down to the nuts and bolts, especially in buildings earmarked for complete closure/repurposing.

https://www.fibreprovider.net/news/bt-provides-details-exchange-closure-plans#

NDNIC what about all the coax that might still be on the DDF's at the exchanges, or the scrap value of the circuit boards in the thousands of exchanges? I would think the value of steelwork would be insignificantly small next to the scrap value of other things that'll be redundant post the 2025 PSTN switch off.

VMO2 are loaded up with more debt than BT and pulling in far less revenue. The reason the market doesn't punish VMO2 is because it isn't traded on public markets, so the media gives VMO2 a free pass whatever their business outlook is. I don't deny that losing a large wholesale CP like Sky would be a hammer blow to BT's revenue, but I don't see it happening. In the event that Sky did fall out with Openreach and decide to migrate their customers over to NetCo, that would be an expensive move and Sky already have it pretty good with Openreach. Openreach give companies like Sky a lot of freedom and access to infrastructure, which reduces the cost for CP's using their own contractors, for NetCo to emulate what Openreach are doing they'd have to allow CP's similar freedoms available using Openreach infrastructure. I'd argue that NetCo/VMO2/Nexfibre aren't currently geared up to offer the same levels of access as Openreach, so the CP's would rely on VMO2 to manage everything at a price. I think it's easy to speculate about what Sky may or may not do, but logistically it would be labour and time intensive, difficult, risky and expensive transition to transfer customers. In such an event, BT could drop the price of it's retail offerings, through EE and Plusnet, presenting a risk to Sky should customers decide to move provider at the end of their contracts, or refuse to allow work to move their service. I suspect the risks involved in moving their whole customer base over to a different infrastructure provider, would make them think very hard before doing it, and they already have a pretty good deal with Openreach, why would they rock the boat?

I hold zero Crypto tokens and no investments in any Crypto related stocks. I don't see any value in any Crypto tokens, in my opinion investments in them are nothing more than betting on Red or Black. Even though I don't invest in Crypto related stocks, I do believe that some of the developers may do well in relation to Centralised Proof of Stake CBDC's and Commodity linked Tokens. Blockchain is a useful technology, I just don't believe decentralised Crypto is secure enough, and is also at odds with State finances and traditional financial industries; If I'm correct the powers that be would never allow decentralised crypto currencies to become fully mainstream. ETF providers know that Bitcoin is nothing more than a speculative gambling chip, they wont admit it because they want to transfer wealth from the believers to the House, and the House always wins.

Depends how the Fibre's been laid within the shared ducts, if they've used sub-ducting then the fibre cables will be doubly protected.

"There are many types of ducts installed throughout the UK, the most common size of duct we come across is 100mm in size and flexible. We have also installed sub-ducting which allows the separation of newly installed Fibre cables, it also allows us to easily install the cable rather than it being tangled with other cables within the duct. Sub-ducting is usually 50mm in size."

https://www.netservecabling.com/our-services/cable-pulling/

Where they may not have sub-ducted, exterior Fibre cables can be quite robust and since they're removing and scrapping the copper cables, they'll just cut the copper cables at each manhole so they only have to pull out short lengths at a time. Overall I don't think they'll have too many problems removing the trunk copper cabling.

Aus I seem to remember you beating that drum last time speculative articles appeared professing a tie up between Sky and VM, and what subsequently happened? Sky locked itself even deeper into Openreach.

Not really since VMO2 is already under foreign ownership, Liberty Global and Telefonica, which would mean the whole of the UK Telecom sector would then be under foreign ownership. Incidentally Telefonica was one of the main parties canvassing the EU to remove the TESTA contract from BT Global, after BT won it fairly and squarely; Since Telefonica was the most vocal objector, and half owner of VMO2, maybe the UK Government should review VMO2's suitability to bid for any UK Government contracts.

It would seem BT bashing is acceptable in OFCOM's view since they keep very quiet about rhetoric directed at BT from competitors, yet they threatened to beat BT up when Jansen aired his views. What I do believe is that OFCOM will have to remove BT/Openreach's regulatory shackles by the end of this decade, since most of the country will be covered by at least two fibre providers by then, and countless numbers of CP's using a wholesale product.

Something else I've pondered over, is what would happen if Openreach lost one of it's major wholesale contracts to another provider, something like Sky moving to NetCo; Obviously Openreach would lose a major customer to a competitor, with a significand chunk of revenue leaving the business, but how would BT/Openreach respond to that? I imagine that under those circumstance BT would be released completely from any regulatory oversight and given a free hand to set pricing as they wish, so BT and Openreach would then likely go into full compete mode against the competition, and a broadband price war would break out. BT, Sky, VMO2 and others probably realise this, so it must be something quietly discussed and planned for in the UK Telecom Sector boardrooms; It'd likely create a similar situation to what happened in the India Mobile market, where Jio unleashed carnage with aid of the Indian Government.

The market often gets it wrong, they don't even talk about the reductions in Capex and cost savings from 2026 onward. The analysts must recognise BT's ability to grow Net Profit and FCF, post FTTP rollout, but they choose to push a different narrative. I topped up some more a couple of days ago, below 103p, along with a Vodafone top up on the same day. I'll just keep reinvesting dividends while I perceive my stocks to be cheap. It's up to everyone else what they do, DYOR.

Indeed Oracle, yet Barclays only have a target of 225p for the whole of BT. This topsy turvy upsy downsy investing world is very confusing.

"&!you need to do your homework on uk cable networks . You are all wrong on your two networks theory."

They'll have to run two networks, since they wont be able to retire the DOCSIS network until they've moved all the customers over to FTTP. To do that they'll have to replace all coaxial cabling with Fibre and fit ONT's at all the premises, even the RFOG customers will need moving over to PON with equipment replacement at the customer premise. BT will still have FTTC customers after the 2025 PSTN switch off and probably for a few years. You're correct that I don't know what VMO2 have planned, but If I'm wrong about my DOCSIS/HFC thoughts I'll happily be corrected; So Aus tell me what I've misunderstood and got wrong?

Anyone else greeted with the deep fake Larry Fink Bitcoin giveaway Ad at the start of the Video?

I don't really get why they're creating NetCo, maybe I'm missing something? It appears they're looking at creating a similar structure to BT, where NetCo is VMO2's equivalent to Openreach and the VMO2 brand positioned along the same lines as BT's EE/Consumer unit. The only reason I can think of to create NetCo is because they feel the VMO2 brand will hold back take up among consumers, but I'm only guessing. The hard part will be converting all their current customers to FTTP, they might have to eventually force customers off cable and onto FTTP, since running two networks will be expensive on top of the expense of running fibre to the premises. Funny how this story breaks on the same day as the Telegraph NexFibre story.

On a positive note:

"Though analysts don’t see any altnets, whether that be Nextfibre, CityFibre or Hyperoptic, getting above a 20% market share, “we do see Openreach gradually ceding share to altnets and Nexfibre, resulting in Openreach nationwide market share settling around 60% in the medium term vs 74% at present”.

This implies around two million lost customers between now and 2030, “which supports our Openreach valuation of £30 billion”, said Barclays."

£30 Billion equates to over £3 a share

Forgot to add the link to the report, quoted from in the last post.

https://www.ofcom.org.uk/__data/assets/pdf_file/0017/263303/2023-openreach-monitoring-report.pdf

To add to the last post, the letter from Melanie Dawes is dated Feb 2022 when it was actually sent in Feb 23, quite a typo for a published official letter.

Then in the Openreach monitoring report dated 27th June 2023 OFCOM said:

"The comments of BT’s Chief Executive, Philip Jansen, in February of this year – including being reported as saying Openreach’s fibre push will ‘end in tears’ for rivals – caused Ofcom and industry significant concern, as set out in Ofcom’s response to Mr Jansen. We would be extremely concerned to see similar comments in future and will be keeping this under close review"

Jansen then announced he was leaving BT just two weeks later, who can blame him?

Where's OFCOM when CEO's of BT's rivals come out with this sort of rhetoric? When Jansen made his comment about Altnets OFCOM metaphorically jumped down his throat, where are they when BT's attacked by the Altnet executives.

"Dear Philip,

Thank you for calling me last week on your comments reported in the Financial Times. Although I understand that you consider that you were not correctly reported, reading the article caused us significant concern.

I would like to stress that Ofcom remains committed to our strategy of network competition, as established in the wholesale fixed telecoms market review. The rules we implemented in that review ensure a level playing field for all fibre investors, constraining BT’s market power to ensure that future success will be determined by competition on the merits. Were it to become apparent that BT is able nonetheless to distort competition in the market, we would not hesitate to take regulatory action to address this.

Consistent with our duties, we closely monitor market outcomes and, in this regard, our Equinox 2 consultation of last week explains that we are currently gathering information on whether Openreach’s practice of repeatedly amending its FTTP prices could act as a barrier to altnet entry and expansion.

I would also remind you of the commitments BT made more broadly to fair competition and the work undertaken by the Openreach Monitoring Unit, which includes oversight of issues arising out of the market review framework. We are in a key period for fibre investment and we will be vigilant to ensure that all involved stick to the letter and spirit of the rules. We will publish our next Monitoring Report in June.

Yours sincerely,

MELANIE DAWES"

https://www.ofcom.org.uk/__data/assets/pdf_file/0026/255527/letter-melanie-dawes-to-philip-jansen-060223.pdf

Quite a threatening letter from OFCOM, which in my opinion is unwarranted considering the amount of rhetoric directed toward BT from the Altnets and INCA.

Here's the not so veiled threat:

"The rules we implemented in that review ensure a level playing field for all fibre investors, constraining BT’s market power to ensure that future success will be determined by competition on the merits. Were it to become apparent that BT is able nonetheless to distort competition in the market, we would not hesitate to take regulatory action to address this"

What I believe she's saying is that if you're too successful in competing against the Altnets, we'll pin you down and repeatedly kick you in the nuts until the Altnets can do it themselves, so don't try too hard to compete, or else.

I agree Poker, but it isn't just the Telegraph. BT has been subjected to repeated media bashings over a good number of years. There are examples where stories have been released followed by significant price drops. Off the top of my head I can remember two stories that impacted BT's share price significantly:

"BT’s share price plunged by 7% on the emergence of news of a potential deal, as investors reacted to the prospect of Virgin Media 02 strengthening its position in the market."

https://www.theguardian.com/business/2022/jul/15/virgin-media-o2-explores-bid-for-rival-talktalk

This is what I said at the time:

"fleccy

Posted in: BT.A

Posts: 11,481

Price: 179.10

No Opinion

RE: Why the sudden drop 15 Jul 2022 16:04

Doesn't make a lot of sense to me, why would VMO2 want TalkTalk? It would cost them a couple of Billion, and they would become a customer of Openreach. Even if it happened, it would take them years to migrate customers onto the cable network, with many possibly deciding to move to a different provider.

Is this another of those lets throw out a story, and hit BT's share price?"

Needles to say nothing came of the story, which is what I expected. Incidentally the Telegraph has just tried to resurrect this one and it makes no more sense now than it did back then.

https://www.telegraph.co.uk/business/2024/02/10/virgin-media-revives-talktalk-takeover-as-cash-crunch-looms/

The other story was talk of a collaboration between Sky and Virgin Media which also came to nothing.

https://www.proactiveinvestors.co.uk/companies/news/911539/bt-faces-further-pressure-as-sky-nears-broadband-deal-with-virgin-media-911539.html

Shut up Aus everyone on here knows you're a Virgin Media fanboy, it wouldn't surprise me if you work for them. As far as the content of my posts, is there anything I stated that's incorrect? VMO2 could have actively built out more network geographically years ago, and moved to FTTP too, but they decided to also sweat their old network and upgrade using inferior DOCSIS over HFC and RFOG. VMO2 have operated no differently to BT over the years, so I can use the word hypocrisy to describe the articles content.

Does anyone else find Rajiv Datta's comments slightly hypocritical? Lets see Nexfibre Network LTD is currently owned by Opal Jvco Limited, which in turn is part owned by OPAL HOLDCO LIMITED, who's owners are Telefonica Infra, Sl and Liberty Global Europe 2 Limited.

VMO2 is jointly owned by Liberty Global and Telefonica, who also own Nexfibre, so Rajiv Datta and Lutz Schüler (CEO of VMO2) have the same bosses, which means they are basically the same company thinly partitioned for legal reasons.

Here's the bit I find hypocritical, NTL/VM/VMO2 have been around for decades, shouldn't Rajiv Datta give them a mention for the lack of investment and progress they've made over the last 20 years? Or mention the fact that core network technology has significantly advanced over the last 20 years, allowing for these faster speeds?

As semiconductor technology has advanced, telecom manufacturers have produced ever faster backplanes and cards with massive increases in processing and switching speeds. In the early 1990's networks were plesiochronous (PDH), with the fastest optical multiplexors being 565mb/s, carrying four 140mb/s bearers and used to interconnect cities; The hierarchy was 64k/2mb/8mb/34mb/140mb and 565mb/s. The next advancement in hierarchy was SDH, with a hierarchy starting at STM-1 (155mb/s), then STM-4/16/64/256. These days the networks are moving to fully Optical interconnectivity, using DWDM, but it's taken years of development and evolution to get to the stage they're at now, so the actual reason Gb/s access is now feasible is because the Core networks are better equipped to cope with the massive bandwidths FTTP makes possible. Another consideration is the fact that the equipment has become relatively cheaper as tech has moved on and more manufacturers have entered the sector. BT have only moved as fast as the technology has allowed them to, maybe they could have skipped FTTC and gone straight to FTTP, but that would have required OFCOM to allow BT a fair return on the massive investment such a rollout would have required at the time.

Lots of BT bashing going on these days, especially from the Telegraph. Ben Marlow and James Warrington seem to have it in for BT , for reasons known only to themselves.