Member Info for fleccy

"Tell that to the greedy CEO of BT then and the rest of then. Are you saying everyone else just suck it up and see where it takes us"

It's irrelevant what CEO's earn, they're in a different game entirely. Jansen is already rich, as are most CEO's, as are people born into money, it's pointless comparing them to the average worker. I am 60, worked in Telecoms for over 30 years, and probably worked an extra week per month in overtime for much of my career, so I know what it's like to put in the hours, but I never once worried about what the bosses earn, since it's a different world. I don't believe people like Jansen do these jobs for the money alone, my guess is they're in it for the challenge too.
A lot of BT employee's are probably shareholders too, but the unions talk about shareholders as if they don't deserve returns on their investments. You might have big players like Drahi and Deutsche Telekom as shareholder's, but the majority of shareholder's are people like me who invest to supplement their pension, so I resent the rhetoric coming from Union leaders toward shareholders.
Dave Ward, General Secretary of the CWU, apparently earned £143,000 in the year ending December 2019, that's nearly 3 times the annual salary I was earning at the end of my career, would you agree socialism pays well?

"The UK workforce is getting poorer by every year that passes by while the rich just get more and more and that's a fact we see every day "

I don't know how old you are, but inflation busting pay rises wont make people better off, it'll just stoke more inflation and force the BOE to raise interest rates to combat it. We've been here before, in the 70's/80's/90's, and as I said in a previous post, high mortgage interest rates will take more out of workers pockets than they'll gain in pay rises. I remember my mortgage repayments going up to nearly £500 a month, and I only had a £35,000 interest only mortgage back then. Admittedly, life got easier for us after interest rates came down, but house prices then climbed for new buyers entering the property market. Inflation goes up, followed by higher interest rates, then rents and mortgage repayments go up due to the higher interest rates. Wage rises should follow a smoothing pattern, big pay rises all at once will result in unintended consequences for the economy; I'm pretty sure the Union leaders must know this.

"& yes, a negotiation is where one sides asks for more than they can get & they generally meet in the middle."

The original offer was £1200, but BT raised it to £1500 and said it was the final offer. It's the better paid staff who are missing out on a higher percentage pay rise, the lower paid staff will gain nothing from striking since they're already getting a good percentage increase. Even if the Union eventually won an 8% across the board pay increase, a trainee on £20,000 would still be worse off as they'd lose days worth of pay, while striking, but only see a miniscule increase in their pay. It seems to me that the union are asking the lower paid staff to sacrifice earnings, to help out the better paid older staff who are probably comfortably off anyway.

"Could this one off payment be a benevolent gesture on their part, just to make sure the lower paid staff are not crucified during a manufactured crisis.
If I was trying to a) provoke unions & staff, but take care of the most vulnerable, a £1500 payment, not pensionable not in the form of a salary increase would tick all those boxes?"

It wasn't a one off payment, it was an across the board £1500 pay increase of pensionable salary, so the lower paid staff got a much higher percentage pay rise than the higher paid staff.

"Yes. It’s called negotiation."

But the CWU told BT, only come back if you're willing to considerably up the offer, so there was nothing to talk about. The Union would have only talked to BT if BT signalled an increased offer, that isn't negotiating, so BT only complied with CWU's instructions, nothing disrespectful there.

"they chose to completely ignore the CWU which in my eyes is very disrespectful to all employees and just shows what they truly think of them."

Didn't the CWU specifically advise BT to only come back if they were willing to considerably increase the pay offer? BT had already advised that they couldn't afford to increase above the current payrise.
Clearly the Union gave specific conditionality on resuming talks, it wasn't disrespectful of BT if they weren't willing to meet the Unions conditions. If someone says to you, don't talk to me unless you're willing to do this, would you talk to them if you're not willing to do what they're asking?

"Well the VM/02 story did not impact on the price for long, well done for all who bought into BT on that lovely dip. As the old saying goes, it’s the pennies not the pounds, thanks VM/02"

Still some way to go, to match Thursday's close unfortunatly. The level of the drop makes no sense to me,especially since it was based on nothing more than heresay.

"Like currently £2.3 billion towards the Ukraine war, while our own people are starving. Charity should begin at home."

Ukraine is one of the few foreign aid packages I agree with. In my opinion, there's are massive strategic and moral reasons to give Ukraine any armaments/weapons they need. You can't just steal your neighbours land because you think you can beat him up easily. Russia taking over Ukraine would destabilish all the previously held soviet Eastern Bloc countries. How long before they started separatist movements in other countries bordering Ukraine?

"The Rumours of Talk Talk take over by Virgin is very bad news for BT. Virgin have already proved (with Vodafone hosting VIrgin Mobile) they are prepared to “buy out” contractual obligations, in this case with Openreach."

Aus, I remember from previous threads you're a big fan of VM, now VMO2. Your posts suggest VMO2 will take over Talk Talk and simply migrate all the customers over to their cable/fibre network, it isn't that simple. How many of the FTTC/FTTP Talk Talk customers are in areas covered by VMO2? A good percentage wont be, and even for the ones in the Franchise areas, migrating them over requires VMO2 to attend and do the relevant groundwork. Many customers may not want to go with VMO2, choosing instead to go with a different ISP.
Where are VMO2 getting the £3 Billion from? Liberty and Telefonica are looking for other financial partners, to finance Fibre rollout, would they want to stump up £3 Billion for a customer base that may choose a different ISP at the drop of a hat? Also consider the fact that VMO2 started out with £18 Billion in debt, and the cost of their Fibre rollout plans will likely be on a par with BT's.
I can think of loads of reasons why VMO2 wouldn't be interested in Talk Talk. Remember when I said there was no substance behind the rumours of a Sky/VMO2 partnership? Still haven't heard anything on that one, have you? I view this recent news in the same light, it makes a good story, but I don't see it happening, and even if it did, I don't see it making much difference to BT/Openreach. Jansen's already stated that they'll compete more heavily on price, should business start drifting away. It isn't completely beyond the realms of possibility , but as I stated in an earlier thread, I'll believe it when I see it.

"Fridays - sp fall caused by Illiquidity?"

It's hard to know the cause of share price movements, either way. It appears the Exchanges are ruled by the Algo's, with any large trades mainly done off book. Brokers can also carry out retail trades off book, even on high volume days should they wish, so Algo's can determine stock prices under any circumstance; The big players will likely do all their big trades Off Exchange. Because of the set up of markets, stock prices are easily manipulated either way in my opinion.
To be fair to retail, all trades should be done On Exchange and used for price setting, but that would mean the big players couldn't build big positions on the quiet, in the shadows. I repeat, all this is just my opinion.

"So is that an additional £18b on top of what he has spent, to acquire the remaining 82% of BT. If so, are we to expect an opening bid of 220p. I hope not!"

He'd have more chance of platting fog than getting BT for 220p a share. Deutsche Telekom's original 12% stake was over £4.50 a share, if I remember rightly. For a hostile takeover to be successful, the purchasing company would have to offer a significant premium over the market price, not that the Government would allow it anyway. The market would also start seriously looking at BT's assets, and assigning valuations to the component parts, so the market would do a rerate and revaluation exercise under those circumstances too.

It isn't just BT threatening strikes, the Union's seem to be mounting a coordinated move to disrupt the whole country. The press are indicating Barristers, Firemen, Binmen, Teachers, are also looking at striking, with the Nurses Union apparently looking for a 16% payrise, 16%!!!
It's well known that big payrises drive inflation, which then results in bigger pay demands, driving more inflation, known as a wage-price spiral. I've seen some of the Union leaders speaking, and they specifically talk about better deals for "working people", which suggests to me they know it will plunge many pensioners into poverty; Think of it like this, my private pension is capped at 4.2%, and it isn't like I can go on strike for a better pension, If Union demands are met then in all likelyhood Inflation will increase, and the longer the situation persists the poorer pensioners will become. Lets imagine the 16% example, if that becomes the norm and inflation matches that next year, and the Union's demand inflation busting payrises again, then workers could potentially see 32% total payrise over 2 years; Meanwile I'll probably get a total of 8.4% increase on my pension over the same two years, and should the situation be drawn out over many years, I'll probably have to use my savings until I eventually get to a stage where I have to claim benefits. That seems extreme, but it's what happens in persistently high inflationary periods, the ones who miss out are the ones who can't demand higher income. The Union leaders know this, so they obviously don't care about pensioners.
The BOE has limited tools for dealing with inflation, the most effective tool in the box is interest rates. If the BOE perceive high wage demands driving inflation, they'll ramp up interest rates to combat it. Interest rates can potentially increase monthly, rising much faster than wage increases, so mortgage payers could see their interest payments double, or treble in short order. Under these circumstances the younger workers will suffer the most, as they likely have very little equity built up in their homes, and will likely have larger mortgage repayments in proportion to their income. The Union leaders probably realise all this too. For all these reasons I don't see the Unions getting what they want.
I'm not an Economist, but I lived through the 1970's/80's/90's, and had a mortgage when interest rates went well over 10%, so I've seen the result of high inflation.

"BT : response to notification by the CWU of industrial action
07/15/2022 | 11:44am EDT

A BT Group spokesperson said:

"At the start of this year, we were in exhaustive discussions with the CWU that lasted for two months, trying hard to reach an agreement on pay. When it became clear that we were not going to reach an accord, we took the decision to go ahead with awarding our team member and frontline colleagues the highest pay award in more than 20 years, effective 1st April.

"We have confirmed to the CWU that we won't be re-opening the 2022 pay review, having already made the best award we could. We're balancing the complex and competing demands of our stakeholders and that includes making once-in-a-generation investments to upgrade the country's broadband and mobile networks, vital for the UK economy and for BT Group's future - including our people.

"While we respect the choice of our colleagues who are CWU members to strike, we will work to minimise any disruption and keep our customers and the country connected. We have tried and tested processes for large scale colleague absences to minimise any disruption for our customers and these were proved during the pandemic."

Context:

BT Group awarded a fully consolidated pay increase to its Team Member and frontline colleagues of £1,500. This represents a pay rise of around 5% on average and 8% for the lowest paid and it was effective from 1 April 2022.

Despite this pay award - the highest for over 20 years - the CWU balloted its members, the result of which was a vote in favour of industrial action among its Openreach and BT members. They fell short of the required turnout among their EE members.

The CWU has notified us that they will be holding two days of industrial action for its BT and Openreach members on the 29th July and 1st August, 2022.

Our continuity and resilience processes have been well rehearsed over the last two years: At the start of the pandemic, we saw a near doubling of data traffic over our core network because of the mass shift to home working. At the same time, we had to re-prioritise the work of our frontline key workers due to colleagues self-isolating, social distancing practices and other restrictions from the pandemic - all the while keeping our colleagues safe and our customers and the country connected.

We will work to reduce the impact of any industrial action by, for example, postponing any non-essential planned engineering or software updates - similar to what we did at the height of the pandemic and as we do over holidays like Christmas."

https://www.marketscreener.com/quote/stock/BT-GROUP-PLC-4003616/news/BT-response-to-notification-by-the-CWU-of-industrial-action-40996549/

Something else to consider, why has this story impacted BT so much, and not touched the Vodafone share price? Vodafone were originally touted as being interested in Talk Talk, you'd think a bid from VMO2 for £3 Billion would affect other interested parties more than BT, since it up's the price for other potential bidders. BT would likely be the least affected in the short term, as all they'd see is a change of customer ownership, meaning that Talk Talk would be replaced as BT's customer by another company. The way I see it, in the event of a takeover VMO2 would have to leave the business on Openreach for years, until their own Fibre coverage reaches the same areas as Openreach. VMO2 have also been using Openreach's PIA product for fibre rollout, so basically they'd only be paying £3 Billion for a customer base, who could decide to upsticks and move at any point in the future. Again just my opinion.

"well it has moved from "initial discussions" to tabling an offer with an indicative bid...but..discussions between the two sides are at an early stage"

An indicative bid is non binding, and since neither VMO2 or Talk Talk will comment, how do we know if the story has any substance? Another thing to consider is that neither company is public, and probably not covered by the UK takeover code, so aren't obligated to make any talks public. If they subsequently decide to merge operations, at that point the regulators will get involved, but currently it's all unsubstantiated rumour.

"It seems strange to me that the SP rose after the strike vote , .....it may well have been deliberately pumped up to sell into , and for the shorters to take advantage off...."

Pokerchips, although the thought of strikes are disconcerting, strikes in industries like Telecoms aren't the same as strikes in manufacturing, or travel related stocks. The Network will keep running whether people are in work or not. I worked in Telecoms for decades, and saw many network activity freezes due to Christmas, and events like the Olympics, etc; It's well known that Network freezes massively reduce the number of network faults, without any Engineering activity in the proximity of equipment's. What I suspect BT will do is operate as if in a network freeze, so activity/access on Network sites will stopped and any available staff used to deal with service affecting faults only. I don't know how BT work their on-call rota's, but they'll likely use on-call Engineers and shift workers to catch up on any urgent faults outstanding from Friday. Telecom companies are well used to minimizing operations to reduce faults. The strikes could be likened to similar patterns over the Festive season, when most staff are off anyway.

"I suspect the story is sent to Ben Woods and he just touches it up for publication....the idea for the story and its timing didn't come from him IMO"

Agreed, he's possibly a willing patsy, time will tell if this story has any substance. I suspect, like the Sky story, it'll quietly drift off the news and be forgotten about.

"This all looks like a set up to me...the idea of a £3bn TalkTalk sale has been around a while , at least since since April"

Remember when the rumour mill churned out stories about Sky and VMO2 partnering up, which also hit BT's share price. Another story by Ben Woods of the Telegraph.

https://www.telegraph.co.uk/business/2021/10/03/sky-closes-broadband-investment-deal-virgin-media-o2/

https://www.mobileeurope.co.uk/sky-reportedly-plans-to-invest-in-vmo2-fibre-build-out/

Hmmm still nothing substantive on that one, I wonder if this latest story will go the same way.

"The debt is why it’s often suppressed, despite decent figures. Nothing to do with game playing, Drahi or talk talk etc."

The Debt isn't a big problem though, since the interest payments are covered by earnings. The Pension Deficit is also on a downward trajectory, and probably going into surplus in the coming years. As far as Talk Talk being taken over by Virgin Media, for £3 Billion, I find it really hard to believe the story has any merit. What I don't understand is how VMO2 could even afford to purchase Talk Talk, since Telefonica and Liberty Global don't appear willing to fund VMO2's Fibre rollout plans between themselves, and looking for partners to contribute.

"Virgin Media O2 and owners Liberty Global and Telefonica have confirmed they are in discussions with a number of potential financial partners regarding a new fibre joint venture.
The new entity is apparently tasked with building out a full fibre network of up to 7 million premises in new greenfield areas by the end of 2027, with VMO2 acting as an ‘anchor tenant’ of the new network. The announcement makes no mention of where this network will be built, so we’re left to to assume by the reference to VMO2 that it’s the UK. This follows reports last month in which some sources claimed the companies were looking to raise as much as £1 billion from investors for the new project."

https://telecoms.com/513557/liberty-global-telefonica-and-vmo2-confirm-new-joint-network-plans/

It's because of stories like that, I question VMO2's ability to buy Talk Talk with cash. It's possible that Talk Talk owners could do some sort equity deal, where they recieve shares in VMO2, which is the only way I could see this happening, but that carries risks for both parties, and will likely lock Talk Talk owners in for years without a return on theuir investment.
Either the market see's something I don't, or they don't understand the difficulties surrounding a VMO2 takeover of Talk Talk, or they're using this to bash BT for other reasons. All the above is my own opinion, and I'll happily be corrected if I'm reading things wrongly.

"fleccy have you not yet realised that this stock is the most manipulated stock on the whole top 100 every time it tries to break out negative news suddenly appears."

I don't disagree that BT's price appears to be gamed, with these VM stories appearing out of the blue and dramatically dropping the price. I just can't imagine the Government would allow it to be sold off in the middle of FTTP and 5G rollouts, as the press would crucify them for letting another UK asset fall into foreign hands, and the national security implications of Government secure communications being managed by a foreign entity. If there is anything obscure behind this, it's either about quick profits, or stake building, in my opinion.