Member Info for fleccy

"Come on Larry. That's what fleccy does. Bet he works full time in the BT News Room. And I reckon there's a whole team of him, all with the same predictably dull writing style."

Handy, every time you imply I work for BT's media team, it makes me chuckle. The suggestion that there's more than one of me makes me laugh out loud.
It even made the horse on Disenchantment laugh.

https://www.youtube.com/watch?v=h3F9AkQMi1s

"If Farage were ever to gain power it would end in similar fashion."

https://www.youtube.com/watch?v=txY6JmP9ULg

They're really going after him now

https://www.youtube.com/watch?v=RUP3l0tGXcQ

In summary going off the Connected Nations and Broadband news figures, by the end of 2022 Openreach will have passed around 9 Million properties, with the Altnets and VMO2 passing around 3.5 Million premises.
The expectations and aspirations in the INCA report don't appear to be reflected in the Connected Nations report, I'd be grateful if others could look through the respective reports/articles and correct me if I've read any of the figures incorrectly and come to the wrong conclusions.

The figures mentioned in the proactive investors article make no sense to me, based only on figures in the Connected Nations updates.

"Deutsche Bank calculates that the alternative networks (or alt nets) build rate of 1.2mln homes (Openreach 1mln) puts them on track to pass 4mln homes in 2022 and to take total alt-net coverage to around 9mln homes by year-end compared to 5mln at end 2021."

The reality is that Openreach are building at a rate of around 60,000 premises passed a week, which works out around 3.1 million per year, with the Altnets appearing to average around 1.2 Million premises passed per year, going off the Connected Nations Spring and Autumn updates.

INCA produced a report in June this year and based on a survey of Altnets, they predicted the Altnets would pass 11.5 Million properties by the end of 2022.
"Fixed full fibre network infrastructure supplied by independent operators is expected to reach over 11.5 million premises at the end of 2022 with an estimated 1.4 million live connections."

"The UK’s independent operators1 are estimated to have passed 5.5 million premises with fibre broadband networks at end-2021"

This would mean the Alternative Networks would have to build past a further 6 million premises, during 2022, based on the "estimated" 5.5 Million premises passed at the end of 2021. The words estimated, expectations and aspirations are used in INCA report.

https://www.inca.coop/sites/default/files/inca_metrics_report_2022.pdf

If you assume the Connected Nations report is correct, 4.3 Million premises were passed in the last year. The Connected Nations report states:

" Full-fibre broadband is available to 12.4m homes (42%): this is 4.3 million more premises (14 percentage points higher) than a year ago, and for the second year running represents the highest year-on-year increase since full fibre started being rolled out in the UK."

Then for 2022, it works out at around 3.1 Million premises passed by Openreach and 1.2 Million passed by the Altnets, totaling approximately 4.3 Million. How VMO2 fits into this, I have no idea, they could be part of the 1.2 Million, or part of the 3.1 Million I've calculated for Openreach, or a bit of both.

According to Broadband news, Openreach are on target to exceed 9 Million properties passed by the end of 2022:

"Openreach in its latest press release says they are building FTTP at 60,000 premises passed a week and the 7 day average in the last month for our tracking worked out at 59,979 premises passed, so we can confirm their build pace.
With a footprint of 8,946,376 premises passed in our database by the Openreach FTTP network we still behind the actual total Openreach will have built to. We estimate we are around 5 to 6 weeks behind what the engineering teams are building"
https://www.thinkbroadband.com/news/9403-openreach-full-fibre-rollout-report-for-december-2022#:~:text=Openreach%20in%20its%20latest%20press,can%20confirm%20their%20build%20pace.

"Just because they are passing homes doesn’t mean people are using their services."

I totally agree with you on that Erik. There are a few things that might discourage take up, like contract period remaining, hassle factor, and many will be more than happy with their superfast service. You'll always get a percentage moving onto FTTP because they want the latest thing, with many going for the faster rates even though they don't need the capacity.

The reason I posted the article and then the Connected Nations Spring and Autumn updates was to demonstrate the sort of negative articles aimed at BT. In my next post I'll elaborate more on the confusion in the figures quoted from various sources.

Continued:

Even if we say Openreach passed 1 Million premises over the period, that would mean the Altnets only passed 400,000 premises, less than half the speed of the Openreach build rate.
Assuming the Altnets are averaging 400,000 premises passed every 4 months, then they would pass 1.2 Million a year in aggregate, but Openreach would pass over 3 million premises during the same period, not the possible implied 1 million per year which the article may be suggesting in a confusing way.
Again am I confused in my interpretation of the article?

I've come across this article and personally view proactive investor as negative toward BT, previously featuring lots of content from Polo Tang,

Here's the article link:

https://www.proactiveinvestors.co.uk/companies/news/1001651/bt-s-broadband-arm-to-be-overtaken-in-2023-suggests-deutsche-bank-1001651.html

The article, apparently using Deutsche bank calculations, reports:

"Latest data from regulator Ofcom notes that in aggregate some 1.5mln unique premises were passed by full-fibre networks in four months to the end of August 2022.

Deutsche Bank calculates that the alternative networks (or alt nets) build rate of 1.2mln homes (Openreach 1mln) puts them on track to pass 4mln homes in 2022 and to take total alt-net coverage to around 9mln homes by year-end compared to 5mln at end 2021."

The Ofcom Spring 2022 update states:

"Full fibre deployment: A third (33%) of homes have access to full fibre services. Full fibre coverage is now at just under 9.6 million, up from 8.2 million (28%) reported in our December 2021 report. This is driven predominantly through deployments by the larger fibre infrastructure operators but supported by a number of smaller providers across the UK serving individual communities and regions. "

https://www.ofcom.org.uk/__data/assets/pdf_file/0031/237865/spring-2022-connected-nations-update.pdf

The Ofcom Spring 2022 update states:

"Full fibre deployment: More than a third (37%) of homes have access to full fibre services. Full fibre coverage is now at just over 11 million, up from 9.6 million (33%) reported in our Spring 2022 update. This is driven predominantly through deployments by the larger fibre infrastructure operators but supported by a number of smaller providers across the UK serving individual communities and regions. Some of these deployments benefit from a range of public sector funding schemes which we outline below."

https://www.ofcom.org.uk/__data/assets/pdf_file/0014/245003/connected-nations-Autumn-Update-2022.pdf

So in the period between the two reports, the number of premises passed increased from just under 9.6 million in the 20th May update, to 11 million in the 7th October update, a total increase of 1.4 million premises passed over the 4 months.
If I'm understanding the Ofcom updates, the figures include Openreach and
and Altnets premises passed, am I wrong in thinking that?
Openreach are averaging a build rate of nearly 60,000 premises every 7 days, so if we say 140 days between the updates Openreach should have passed around 1.2 Million premises between the two updates, which means the Altnets passed just 200,000 during the same period.
Openreach may have built slightly less than my calculation, with the Altnets building slightly more, but I just can't get my head around the figures and conclusions made in the article.
Can someone explain if i'm misreading the article and figures, leading me to a completely different conclusion than the article?

FTTP, 5G and Fixed Wireless Access report

"Full-fibre broadband is available to 12.4m homes (42%): this is 4.3 million more premises (14 percentage points higher) than a year ago, and for the second year running represents the highest year-on-year increase since full fibre started being rolled out in the UK.
Gigabit-capable broadband is available to 20.8m homes (70%): this includes full fibre and upgraded cable networks that are capable of delivering download speeds of 1 Gbit/s or higher.
The number of premises without access to decent broadband continues to fall: factoring in coverage from both fixed and fixed-wireless networks, nearly 80,000 homes and businesses (0.3%) still do not have access to decent broadband. We estimate that around 15,000 of these will be covered by publicly funded roll-out schemes in the next 12 months.
5G rollout has rapidly increased: the level of coverage provided outside of premises by at least one mobile network operator is now at 67-77% (up from 42-57% last year). This coverage is supported by 5G deployments on a total of around 12,000 sites, almost double the amount we reported last year. "

https://www.ofcom.org.uk/__data/assets/pdf_file/0034/249289/connected-nations-uk-report.pdf

https://www.ofcom.org.uk/__data/assets/pdf_file/0028/248248/Connected-Nations-Planned-Network-Deployments-2022.pdf

Thought I'd start a thread on AI and the future of the technology. As touched on in previous posts by others, AI will change the world with many jobs disappearing and other jobs requiring less human hands.
Here's Youtube video's explaining some recent advances in ChatGPT, showcasing some of the possibilities for the technology.

https://www.youtube.com/watch?v=0uQqMxXoNVs

https://www.youtube.com/watch?v=Fw5ybNwwSbg

BT are investing in AI through offerings like AI accelerator:

https://newsroom.bt.com/bt-group-unveils-ai-accelerator-to-shorten-rollout-of-new-artificial-intelligence-from-six-months-to-six-days/

The AI will improve over time dependent on the amount of data it processes and advances in the hardware powering the technology. There are currently limits to the capabilities of AI, but with every interaction the AI processes it learns, so it's easy to see why BT are investing in the technology.

"WOW. And I thought I was an optimist. But you get top prize.. Of course all paper losses are losses. Everything is on paper, we no longer trade in bread or meat etc,it is all on paper. You and me are both chasing our losses, the only difference is I am not pretending"

I'm not chasing losses by averaging down my cost per share while I see my stocks as cheap, I see it as a good investment in a stock I believe in. I also don't see it as optimism in believing I'll do well at some point in the future, I see backing up my initial investments as calculated moves. I'm not alone in that sort of strategy, it's the sort of thing you'd hear from someone like Buffet and e& said as much when they made their latest purchase, in their words:

"The rationale of e&'s investment in Vodafone is unchanged from the original investment, as announced on 14 May 2022, which is to gain significant exposure to a world leader in connectivity and digital service at an attractive valuation."

https://www.lse.co.uk/rns/VOD/e-announces-increased-investment-in-vodafone-nxvjucwm7v056ga.html

"Sorry fleccy, I love your confidence,& the fact you are one of the only posters on here that seems to understand the share buy back scheme, you do seem to lose your sense of reality sometimes. I.E. You & me are losing money, but hopefully we can win it back, of course? Just be honest with yourself?"

Speak for yourself Daniel, if you perceive a paper loss as losing money that's up to you, but I see a paper loss as transitional and it only becomes a real loss once I sell. In February my investments were in the black, I was showing a paper gain but I didn't realise the gain because I didn't sell, so it works both ways. Since I earn dividends I have the choice to reinvest while the price is low, or I could just as easily use the dividends for income if the shares become expensive.
At worst, by sitting on a paper loss we might be missing opportunities to invest elsewhere, and make big profits should we be lucky enough to invest in the next big thing, but we could just as easily invest in something high risk that destroys our capital completely.
To clarify my way of thinking, lets say Vodafone goes up to £2.40 again, which would be a paper gain of nearly £1 per share for me, I might choose to leave my investment in place and keep collecting the dividends as income and I can look at the gain in my share dealing accounts and feel good about it, if I was that way inclined, but in reality my capital position is no better than it is now unless I choose to sell. It might be hard for you to understand, but emotionally I don't worry about sitting on a paper loss, I do get irritated at the market narrative and games, that I view as false, but that's about it.

"fleccy. The main difference between self investment & an annuity, is that with an annuity, when you die, your investment dies with you, but with an investment , it doesn't. Big difference!"

There are various options with annuities in respect of spouses, and I didn't consider the after death capital inheritance issue, since we were talking in terms of income while alive; But you're correct, in inheritance terms it makes a big difference.

"As a tax payer I think I prefer the lowest tax option over the long term and all non discretionary spend will be covered by annuities in my retirement."

I'm not really clear on annuities. I've had three pensions over my lifetime, two are final salary pensions and the third was a DC pension which I put into drawdown, investing the cash into stocks in the ISA's; I didn't even consider an annuity due to the amount involved and my age; I also wasn't earning at the time I put the DC pension into drawdown, so I was entitled to 25% tax free plus my income tax allowance on the first payment, which was two thirds of the entire pot. I did have to pay some income tax on the drawdown payouts, but insignificant as far as I was concerned.
Everyone's circumstance are different and retirement planning is like buying a pair of shoes, one size and style doesn't fit all, so you have to look for the correct size in the style that suits you.

"Think I read recently you could buy a £7k level annuity for £100k."

Maybe if you're over 65, but that's still a good few years away for us.

https://www.hl.co.uk/retirement/annuities/best-buy-rates

There are different ways to look at this, with the annuity you're return is safe no matter how long you live, whereas self investing comes with risk.
If you could be 100% sure that Vodafone would maintain their dividend and the company is sound, currently you could get £21,000 a year income for a total investment of £222,654 + dealing cost, but can anyone be sure that the dividend wont be cut? That's where the risk comes with self investing over an annuity. Something else to consider is that building a self investment portfolio in ISA's gives tax free return but again with risk.

"Not to keen on you revealing too much ££'s and pence in your posts because you never know who's reading these posts."

I'm not too worried, as there are much easier targets on Crypto exchanges and it'd take some serious investigation/hacking/electronic manipulation to target someone like me over the filthy rich easier targets.
In terms of building a portfolio from my three stocks, look at the dividend income on Lloyds, BT and Vodafone and you'll see the investment/yield make them attractive, as long as investors research them and are happy with the safety of their investment.
This isn't the split on our investments, but lets assume a three way split of stock for a portfolio holding Lloyds, BT and Vodafone at current prices.

BT current price 112.95p
VOD current price 83.76p
Lloy current price 45.18p

Lets assume someone is receiving full year dividends of £21,000 across the three stocks, so £7,000 from each.

BT
BT's dividends last year totaled 7.7p
7000/0.077 = 90,909 shares, current value £102,682

VOD
VOD dividends last year 9 Eurocent (7.9p)
7000/0.079 = 88,608 shares Current value £74,218

Lloy
Lloyds dividends last year 2p
7000/0.02 = 350,000 shares Current value £158,130

So, to build a portfolio paying £21,000 a year in dividends, across the three stocks, would cost £335,030. Clearly Vodafone gives the best dividend return for the least investment and Lloyds the worst, at current share prices, assuming I've done my math correctly.

"VOD is still in a long term bear downtrend. So is BT. That's fact not opinion. The fun comes in deciphering when the floor is in."

The only people who know where the floor is, are the big players writing the script in the background. The easiest way of investing, not trading, is to buy when you see value with no set holding period; We're currently sitting on some quite hefty paper losses, but I consider our three stocks BT, Vod and LLoyds to all be undervalued. On the plus side we're receiving dividends of around £22,000 a year and reinvesting dividends in the ISA's, while taking the dividends in the share dealing accounts to be used for other things.
Some people attack this style of investing, as they seem to think dividends are useless and trading's the way to go. It takes confidence in your investments to hold when you're underperforming, but I see value in our investments and reinvesting half the dividends gives us growth, while the other half goes into our bank account for other uses, like forward buying shares in the isa's, then reducing stock in the standard share dealing accounts; You just have to make sure you sell in the standard account when the price goes above your purchase price in the ISA. Everyone has different investment goals and strategies and should do their own research, but what we're doing suits us.

"Anyone not able or willing to take up the cheap shares got heavily diluted."

There's no indication Vodafone will have a rights issue. One reason I can't see a rights issue is that they've been buying back stock to prevent dilution and another reason is that it'd be madness to have a rights issue with the share price at rock bottom.

"Companies in trouble with too much debt often do a rights issue to get some money in.
Vodafones buying of shares each day seems a bit stupid in my opinion, they might need that money very soon."

Are you saying Vodafone's in trouble? Just because Read's gone doesn't mean they're in trouble financially, the most likely reason is disagreements on strategy going forward. All any of us can do is guess how things will unfold when a new CEO is appointed and communicates a strategy. No doubt e& will have a view on Vodafone maintaining the dividend, all any of us can do, currently, is speculate.

"Doesn't make sense. They need to suspend dividend anyway. The buyback could be used to pay down debt."

But the buyback are paying down debt in a way and preventing dilution.

"The took on debt to buy the Vodafone stake"

If that's the case then they're silly Billy's. Who supplied the debt and on what terms? Is the interest on the debt covered by Vodafone dividends?