Member Info for fleccy

"Fleccy. What are you on about, there’s nothing wrong with my 405 line TV service"

Your telly must be old, I'm on 625 UHF now.

I didn't notice it when I started this thread, but it appears that Freesat and Freeview are looking to merge, if approval is given. I'm guessing this might impact SKY going forward, and make them look at the whole of their UK business. It could shake up media offerings significantly, and will be good for Nige's ITV shares I suspect.
Currently we have SKY, Youview, Freeview, Freesat, and Virgin offering TV services. According to WIKI:

Youview is owned by "the BBC, ITV, Channel 4 and Channel 5; and three telecommunications operators, Arqiva, BT Group, and TalkTalk Group."

Freesat is a joint venture between the BBC and ITV plc.

Freeview is a "a joint venture between the BBC, ITV, Channel 4, Sky and transmitter operator Arqiva."

We already know that VM is owned by Liberty, and SKY by Comcast.

With SKY being a partner in Freeview, I'm not sure how they feel about a Freeview/Freesat merger, but they could turn into a major competitor to SKY, if the merger is approved. It looks as though UK TV services may get more exciting in the near future.
The article below states that the joint venture partners for the combined Freesat/Freeview company will be the BBC, ITV and CH4, following Arquiva's departure in March.

https://rxtvinfo.com/2021/broadcasters-bring-together-freesat-and-digital-uk-what-does-this-mean-for-viewers

https://www.digitaltveurope.com/2021/02/11/freeview-and-freesat-to-integrate/

"I’m sure shareholders don’t fancy a rights issue at current levels to raise the cash snd dilute their shareholding’s"

It would be madness to have a rights issue with the current valuation. BT aren't short of cash, so can't see them going down the dilution path.

Since we can only form opinions based on various articles, it's worth reviewing past articles to see if we can build a picture.

In May last year, speculation increased around a partial sale of Openreach.
"BT began to bounce back off near-record lows as rumours circulated that it was selling a stake in its Openreach engineering arm."

https://www.thisismoney.co.uk/money/markets/article-8324607/MARKET-REPORT-BT-bounces-rumours-Openreach-stake-sale.html

At the same time, Clive Selley spoke out refuting the rumour.
"Mr Selley said wrote: “Many of you will have seen the reports overnight about BT being in talks to sell a stake in Openreach. I spoke to [BT chief executive] Philip Jansen last night after the story broke in the newspapers. He is very clear – the story is inaccurate. Openreach is staying in the BT group.” "

https://www.telegraph.co.uk/technology/2020/05/15/openreach-boss-denies-stake-sale/

Then back in December.
"The boss of BT's network arm would back selling a minority stake in the business – if the investor supports rolling out fibre broadband across the UK.
Openreach chief executive Clive Selley has admitted that his division was a 'big drag' on spending, and his comments will fuel speculation that BT could strike a deal next year, after group boss Philip Jansen said he was 'open-minded' about one last month."

https://www.thisismoney.co.uk/money/markets/article-9079941/Openreach-boss-selling-minority-stake-right-investor.html

In January
"The chief executive is himself not against the idea either, not least because private equity and sovereign wealth funds thirsty for infrastructure investment opportunities have been banging on his door. But it won’t happen in 2021. First BT needs to finalise a pension deficit settlement which may include pledging a stake in Openreach to keep top-up payments low (and probably preclude a full spin-off). The complexities of that together with the need to secure a deal with Ofcom on full-fibre broadband pricing mean this tale will rumble into 2022."

https://www.telegraph.co.uk/business/2021/01/02/banking-broadband-bets-2021/

Where we are now.
"Sky News has learnt that Mr Jansen told fellow directors of the telecoms giant over a period of several months that he had become frustrated with the speed at which BT was taking key strategic decisions."
"During the last 12 months, Mr Jansen has talked to advisers about the sale of stakes in BT's wholly owned but arm's length subsidiary Openreach and its Global Services division without ultimately pursuing a deal."

https://news.sky.com/story/bt-chief-jansen-gave-board-ultimatum-over-chairmans-future-12236480

The speculation is that Du Plesssis and Jansen disagreed primarily over Openreach, it will be interesting to see if this is the case. I haven't got an objection to BT selling off a minority stake in Openreach, as long as the valuation at least £12 Billion for 49% of the business.

Hard to say, it was recently as high as 148p on no news, and dropped back to the 120's. The market are reacting because BT suddenly became more exciting.

"Sky always offer you a great deal to stay with them. I recently got all 11 sports channels for £15 a month. You must threaten to leave though and quote a deal offered by Virgin etc."

Thanks Pete, currently BT are offering Broadband for 24.99, with BT TV plus entertainment pack for an extra £12 a month, or with the additional sky cinema pass for £22 a month. Under BT's 24 month deal, I could get more than I'm getting now for £46.99 a month, or the more or less same for £36.99 a month. I'm currently paying SKY £54 a month, going up to £70 a month in June. My current 18 month contract doesn't end until the beginning of June, so I need to look at my options near the end of April.

Just saying!!!

I have to say, for a company like Blackrock it wasn't in play very long. They must now feel that BT wont be heading back to the mid 120's again.

It was the Budget that shook them out.

The chart on Lee's shorttracker link shows it going to 0 on the 3rd March, I think it's gone.

The other possibility is that they don't have to declare it to the FCA, due to being under 0.5%, but I thought the reporting FCA threshold had been reduced to 0.1%.

I can't see the BT short at all now, they must have closed it completely, unless I'm missing something.

https://www.fca.org.uk/publication/data/short-positions-daily-update.xlsx

"As far as the Broadband, I'll review deals toward the end of May, and around the same time I'll phone SKY to cancel my TV service."

End of April I should have said, you have to give 31 days notice.

"There's virtually no escape Fleccy, whover you're with if you have a TV package bundled in too. They're all going up."

That isn't strictly true, I'm currently on SKY Q with a wideband LNB on my dish. If I cancel my SKY TV subscription at the beginning of June and purchase a 500GB Freesat box for £199.99, it will have paid for itself in under 6 months. I'll lose my SKY GO and channels like SKY Atlantic, SKY ONE, etc, but I can live without them as I already have Amazon Prime and Netflix. As far as the Broadband, I'll review deals toward the end of May, and around the same time I'll phone SKY to cancel my TV service. Depending on what's available, and the price, I might go with another subscription service at the right price, instead of purchasing a Freesat box. If SKY offer me a deal to stay then i might reconsider, but I'm currently focusing on looking at alternatives. With Freesat you get CNBC and Bloomberg, so the financial news channels are available too, and many other channels.

https://www.freesat.co.uk/channels

https://www.freesat.co.uk/get-freesat/set-top-boxes/recordable-4k-tv-box

My SKY 18 month contract ends in June and i've checked my account, as I received an email advising of price increases. I nearly fell over when I read the increases lol. My current monthly bill is £54, which comprises of £27 for Broadband, and £27 for SKY Q.
I checked my Future bills and it increases to £57.50 in April, £60.51 in May, and a whopping £70.50 from June onwards. I nearly fell of my chair with the TV package increasing to £38 and the Broadband increasing to £32.50. That's over 29% increase, adding up to nearly £200 a year extra. The June increase coincides with the end of the 18 month contract, and I don't have SKY Sports, or the Movie channels either, they really are having a laugh.
I've already started looking at other options, and I do like SKY GO, but there's no way I'm paying that. When I ring them if they hold to that price, I'll be cancelling and moving providers.

"this would then allow them to benefit from the 30% profit margin available under these plans."

Aus, my understanding is that the 30% is based on the difference between the current 100% business rates relief. on new full fibre installation, and the new Super Deduction benefit. If EE invested heavily in 5G Base station equipment, or built masts, or invested in the associated transmission network, all these costs may be offset against the tax allowance. BT/EE/Openreach investment isn't all about Fibre rollout, I would think there are lots of other opportunities to take advantage of this 2 year handout.

"ThIs I is a a 130% tax reclaim relating to Corp Tax. These numbers can not be stretched much beyond the £500m for next year and the year after. If investment is ramped up this will probably have an impact on costs thus reducing profit which defeats the object (assuming all costs are not capitalised)."

Larry you seem pretty confident when it comes to Tax issues, maybe you could clear a few things up, with respect to BT's possible tax savings. BT have stated that this will significantly cut their tax bill, so this will have an effect. As I stated in a previous post, the difference between profit before and after tax, for FY 2019/20, was over £600 million; I also assume that the tax paid in the last financial year was reduced, due to the current 100% business rates relief on new full fibre installation, so surely BT will have an opportunity to reduce their Tax bill significantly through bringing forward investment within the next two years accounting period? If they paid £600 million in tax in 2019/20, then projecting the same tax bill for 20/21 and 21/22, couldn't they potentially reduce their Tax bill by over £1 Billion over the next two years? Since Fibre already has Tax incentives, they could possibly invest more in 5G, or other infrastructure to cut their Tax bill.
I can only just do my own Tax returns, so I have next to no knowledge about Tax matters, I'm just trying to understand your point of view.

"Its an extra 30% deduction so the benefit is 3.6B. The 12B you would get a deduction for anyway under existing rules (albeit this accelerates the timing of it)."

I don't subscribe to the times, so unlikely to see through the paywall. I assume this refers to the difference between the current 100% business rates relief on new full fibre installation, due to end in April 2022.

https://www.gov.uk/government/consultations/business-rates-relief-for-new-fibre-on-telecommunication-hereditaments

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/640703/Consultation_on_Business_Rates_Relief_for_New_Fibre_on_Telecommunication_Hereditaments.pdf

BT have other investments ongoing, such as 5G, so BT's Bean Counters will be putting in overtime to find ways of utilising the new Tax relief. On the plus side, BT won't need to search out infrastructure investment, they just need to accelerate their current build program.

I love the final comment in the Guardian.

"So yes, Sunak should succeed in getting a few cashed-up companies to invest more rapidly than they might otherwise have done. But is this the most effective use of a £25bn tax break?"

The reporter is describing BT as a "cashed-up" company, which is what everyone knows anyway. The market knows BT is well financed, with good cashflow, which makes the current low P/E look ever more ridiculous.

Sour Grapes from the Guardian

"But there may also be a reason why such a blunt tool has not been used on this scale in the past. As well as encouraging fresh business spending, the Treasury may also find itself rewarding investment that would have happened anyway.

Take BT, whose annual capital expenditure budget is about £4.5bn. Its share price shot up 7% after the budget speech, presumably on the thought of the juicy allowances that can now be claimed over two years for the roll-out of fast-fibre broadband.

If BT responds by getting fibre to premises more quickly, that could be considered a benefit for the nation. But the gain may be marginal since the programme is well under way. Any acceleration may also be concentrated in cities, where it is easier to speed up, rather than rural areas.
So yes, Sunak should succeed in getting a few cashed-up companies to invest more rapidly than they might otherwise have done. But is this the most effective use of a £25bn tax break? It feels unlikely."

https://www.theguardian.com/business/nils-pratley-on-finance/2021/mar/03/super-deduction-may-not-be-most-effective-use-25bn-tax-break