RE: ‘Overcooked’ call sends chill through BT shares5 Jun 2021 15:51
"Sold all my 6000 holding Friday £1.77 having bought in £1.16.Been reassessing my position with the virgin 02 merger going ahead and alarming amount off entrants now entering the fibre market"
Well done for making a good profit, we should all make our own investment decisions based on our interpretation of the stocks we hold.
Personally I'm keeping hold of 77,569 BT shares, as I previously pondered all your arguments to sell, and decided that none of them affect my investment view of BT.
The VM/O2 merger doesn't have any impact on BT, as far as I can tell. I can see some advantages from a triple play point of view, but that'll take years to come through and wont necessarily affect BT's business. In my opinion, the reasoning behind the VM/O2 merger was about debt reduction for Telefonica, and VM needing to try something new. The new company will be loaded with £18 Billion in debt, from the outset, and they've stated they intend to invest a further £10 Billion in new infrastructure. As I stated previously, VM's DOCSIS based architecture is less efficient, and more outdated than full PON networks.
Like you, I regularly read the articles in ISPreview, and it does indeed read like a new Altnet appears out of the blue on a weekly basis, but I wonder about the business case for all these start up Altnets. Most of the new Altnets are using Openreach PIA, utilising Openreach managed (BT owned) ducts and poles, so BT get a cut. It isn't just a matter of putting fibre in the ground, or overhead, you need a building to house your Head End equipment, Air conditioning, Backbone and interconnectivity, and not forgetting people to monitor and maintain it. My point is, Telecom networks are expensive unless you have sufficient scale. Even VM/O2 will use Openreach PIA for much of their build, so again BT will get a cut.
Over the years, many have written BT off, like when the cable tv companies started up, Mercury/C&W, smart boxes, Carrier Preselect, Dslams in Colo areas, etc, etc, etc, it isn't like we haven't heard it all before.
The Sports channel thing is a recent development, and I'm pretty sure with the buzz around media, that BT will do some sort of deal.
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