Member Info for fleccy

"BT, Britain’s biggest broadband and mobile provider, said the “super deduction” tax break for investment announced by the government on Wednesday would significantly cut its tax bill for several years."

https://www.reuters.com/article/bt-tax/britains-bt-says-super-deduction-will-significantly-cut-tax-bill-idUKL2N2L13KI

"Super Deduction......hmmmm sounds like “Super Dildo-action"

H-hi. I ignored your previous bareback comment, but there's a pattern forming. Are you sure you're posting on the correct forum?

Not sure what qualifying new plant and machinery assets are. The Government website states:
"From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to claim:

a 130% super-deduction capital allowance on qualifying plant and machinery investments
a 50% first-year allowance for qualifying special rate assets
The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest, ensuring the UK capital allowances regime is amongst the world’s most competitive.

The government has offered unprecedented support for businesses during Covid. Even so, pandemic-related economic shocks and the accompanying uncertainty have chilled business investment. This super-deduction will encourage firms to invest in productivity-enhancing plant and machinery assets that will help them grow, and to make those investments now

Published 3 March 2021"

https://www.gov.uk/guidance/super-deduction

"Fleccy - I don’t think there is a case to spend as much as they can, unless they can carry on claiming tax relief over next 10 - 15 years
If BT only pay £300mln in tax, they can only ever claim £300mln back or £210mln if they want to maximise profit.... if they spend more tan £210mln (for this example) they reduce profit opportunity"

No doubt BT's accountants will be looking at this in detail and working out the best way of utilising the the tax benefit, which might include borrowing and investing more than planned in the next two years.
BT stated for FY 2019/20:
Reported profit before tax £2.353 Billion
Profit after tax £1.734 Billion
So I assume the tax bill was £619 Million for 2019/20

I'm not a tax expert, and I don't know how much tax can be offset against future earnings, but with BT facing major investments in FTTP and 5G, their accountants will be working out a strategy to take full advantage of this Government handout.

"The 130% tax cut for business investments for the next 2 years can be carried forward meaning it would make sense for BT to ramp up in FTTP and G5 expansion ."

Indeed there's a case for them investing every spare penny into FTTP and 5G over the next two years, including further suspending the dividend and diverting the cash into infrastructure investment.

I wonder if this will help BT with its investment in FTTP and 5G.

"Chancellor Rishi Sunak introduces "super deduction" for next two years, meaning when businesses invest "they can now reduce their tax bill by 130% of the cost""

"Fleccy - the problem with living in the past is you lose perspective"

I don't think I live in the past, I only left the Industry at the end of 2019 lol. BT own Openreach, and all the Ducts, Poles, Wayleaves, as well as the majority of the Fibre going forward. It isn't just the likes of Virgin, Vodafone, or Sky that are using Openreach offerings like PIA; Many councils are building their own PIA network infrastructure, to connect various entities within their areas, as an example. With Openreach offering PIA, it may eat into BT's traditional business, but it also pushes out the business for other providers. VM and BT will compete for wholesale Dark Fibre, and other business, but VM are behind BT in many parts of the country, and BT have always been a provider to big business, so well established. I'm sure VM will do well, but the combined revenue of VM and O2 doesn't currently come close to BT's, and BT are rolling out FTTP/5G at a rate of knots. BT/Openreach's strengths are either played down, or under estimated by the market imo.
Aus did you read the Vodafone response I linked to, it says it all.

"With a combined BT/EE the incentives for BT Openreach to commercially
supply dark fibre services for mobile backhaul and the incremental revenue
this would generate for BT Group is outweighed by the additional competitive
advantage the mobile division of BT, EE, enjoys as a result of being the only
operator with ‘owner economics’ in mobile backhaul services. EE can increase
backhaul capacity and network speed without incurring incremental external
costs. This is illustrated by the fact EE is already installing higher capacity
10Gbit/s backhaul capacity at each 5G network upgrade.
When Ofcom proposed dark fibre [CONFIDENTIAL], however when Openreach dark fibre was
withdrawn due to an appeal from BT we were forced to reconsider and
[CONFIDENTIAL]. The availability of Virgin dark fibre has again enabled us [CONFIDENTIAL].
This same supply side dynamic will be true for the merged Virgin and O2
business if this transaction occurs. An integrated mobile and fixed telecoms
operator has reduced incentives to supply fixed wholesale inputs to other
mobile operators on terms that will enable them to credibly compete"

https://assets.publishing.service.gov.uk/media/6035388dd3bf7f0ab70a4155/Vodafone_response_to_issues_statement_24.2.21.pdf

"With the market up so high, BT can never restore your manhood. How many times have people asked you when BT would rebound."

H-hi, over the last 5 year period, the FTSE is only up 7%, compare that to the DAX up 44%, or the CAC40 up 31%, DOW up 84%, NASDAQ up 183%. When you describe the market as being high, it doesn't apply to all markets.
There are a couple of ways it can go, the US bubbles could burst with contagion to other markets, or the FTSE could play catch up. Since the FTSE has vastly underperformed other markets, there isn't much room for the FTSE to drop, the US market bursting would catastrophically destroy US investors.

Haha Rod, I shed a tear reading your Bro-com monologue. I suspect many people remember the ridiculously slow transmission speed of the older fax machines, and the rubbish quality arriving at the far end. I don't hold any emotional attachment to BT, apart from the fact that it's one of the few remaining truly British companies.
I've seen all this before, viewed from the sharp end of the Telecom industry. In the early days I worked on a product called Smart Box, that sat at the customer sites between the PABX and the BT lines. Smart Box worked by capturing the tones, or pulses from the PABX, and inserting a number in front of national calls and routing to Mercury. The Smart box/131 access was eventually replaced by carrier pre-select, but Mercury grabbed a lot of the business and residential long distance voice traffic. Mercury produced their own branded telephone sockets and installed Telephone boxes in most city centres and Airports, Railway stations, etc. What's really changed? Instead of companies piggy backing on BT's telephone lines, for voice, they're using Openreach for providing Broadband services, soon they'll be using Openreach Fibre, or Infrastructure. So basically it's similar to the 90's, just using different products. In the 90's BT owned the telephone lines other companies used, since they still own all the infrastructure, not much has changed. As far as VM are concerned, the cable companies were around in the 90's too, and things didn't go well for them then.

"Because BT has been so dominant for so many years, these companies, along with Vodafone naturally seem themselves as BT’s competition, for the first time, they are not far off being able to seriously compete / impact / eat into BT’s market share / dominance."

I used to think like that, in my many years working for Mercury, which was owned as a subsidiary of C&W, then the Mercury brand was dropped and we were simply C&W, and finishing my career working for Vodafone after they took over Cable & Wireless Worldwide. Oops should I have shared all that?
What I subsequently learned, was that BT shouldn't be easily written off. I remember Nynex UK being in the next building when they went bust, and were taken over by C&W, and being tasked with teaching the Cable TV Engineers about PDH transmission. I remember C&W selling the Cable companies to NTL, and Cable & Wireless eventually splitting into two, before both entities eventually being taken over. For over 30 years I've heard, and read that BT will be wiped out by various companies and look they're still here and going strong.
You say that other companies "are not far off being able to seriously compete / impact / eat into BT’s market share / dominance", but this is all deja vu as far as I'm concerned.
How many of these new providers will be around in 10 years? Next to none imo. Many will be mopped up and consolidated into larger entities with probably three or four players left, BT will be one of them, VM/02 will likely be another, with maybe Vodafone taking another spot. Much of the media, and some of the posters on here seem to think that BT will simply get wiped out by competition, which is a ridiculous opinion. Sometimes competition between a few big players can be good for all, and BT will remain the biggest player in the UK.

"I can think of two reasons why Vodafone and sky would want to leverage objections, it doesn’t take a rocket scientist."

No need to be a Rocket Scientist, just read the full redacted responses I posted the links to. The main objection is that they don't want two players dominating the market, with the reduced leverage over BT/Openreach that would bring. BT didn't object to a VM/O2 merger, so I have to assume that they see it as good for them. There's a possibility that the VM/O2 combined entity will be regulated similarly to BT/Openreach, or as Larry says, "put simply the level playing field between BT and it’s competitors has reached parity. Time for OFCOM to release the shackles and allow market forces to provide value for the customer, through investment and fair rates of return". Interesting times.

Just to highlight that VM Sky and Vodafone a business competitors and not best buddies.

"The CMA has published issues statements from Sky and Vodafone submitted as part of its investigation into the proposed merger of O2 UK and Virgin Media."

https://telecoms.com/508790/sky-and-vodafone-publish-their-objections-to-the-virgin-o2-uk-merger/

https://assets.publishing.service.gov.uk/media/603538998fa8f5481187e113/Sky_response_to_issues_statement_24.2.21.pdf

https://assets.publishing.service.gov.uk/media/6035388dd3bf7f0ab70a4155/Vodafone_response_to_issues_statement_24.2.21.pdf

"but all three independently or together are on the opposite side to BT"

Aus I'm interested in your analysis into why VM/Liberty Global have more in common with SKY than BT?
Malone and Brian Roberts may be buddies, but that means little in the business world, in fact my read is that they are competitive with each other, a bit like the Ambani brothers in India.
A fly in the ointment for your theory, is SKY's commitment to using Openreach FTTP to provide service.
SKY is primarily a TV service provider, and competes with BT's TV/Sports channels, and on the broadband side with each having their own offerings over Openreach. Virgin Media are primarily a TV/Internet provider, using their own cable infrastructure, and directly competing with SKY as a media broadcaster. There are reasons why OFCOM and the Competition Markets Authority could reject mergers in both cases, so it's unlikely they'll try, but it would be nice to see an attempt. Another possibility is partnership through sharing Fibre infrastructure, and there are a couple of ways that could happen; One way is for SKY to go into partnership with Liberty Fibre, and share the cost of building new infrastructure, probably using Openreach PIA products. Another possibility is that BT and SKY could go into partnership, and SKY buy a large stake in Openreach, which shouldn't be a competition issue. Either, or neither of these possibilities may happen, but the Openreach stake would be the most interesting for SKY, and the most likely in my opinion.
In this 2018 video, Malone implied that Roberts overpaid for SKY, but also suggested that SKY needs to transition from satellite to Internet. It will be interesting to see how all this unfolds over time.

https://www.youtube.com/watch?v=oqFBbMDr05k

This perplexes me. Zoom has seen a phenomenal increase in profit to $995.7 million, It's been an exceptional year for them, and they've benefited from massive market hype, but how the current market cap of $119.25 Billion is justified is beyond me. Where's the future growth coming from to justify these sky high valuations?

"Badly timed call by BT boss"

Slightly ridiculous title in my opinion. There's no right, or wrong time for people to make lifestyle, or career changes. Maybe he was pushed, maybe he's had an epiphany and decided to visit the Dalai Lama, or any of number of reasons. We can all speculate for now, but we may never know his reason for announcing he's leaving, especially if it was for personal reasons.
Now that he's said he's going, I doubt he will have any power to influence the board, on any decisions, even though he'll theoretically retain his vote for now. Selling part, or all of Openreach would depend on the BTPS Trustee's, and various other factors, so would be a difficult move for Jansen to execute imo. I'd like to see an attempt at a merger with SKY, if Comcast are up for it, although the regulators would scrutinise such a move on many levels, therefore highly unlikely.

Speculative, but possible if Du Plessis was pushed, that a shake may be coming. Some articles have suggested that Jansen isn't against selling a stake in Openreach, and clearly the dividend suspension/cut was Jansen. It's possible some big announcements may be coming, taking into account the previous publicised disagreements between Jansen and Du Plessis. If a shake up is coming, it's anyone's guess what might be involved, but Lee21's post, "BT & EE appoints PR agencies in massive review", would also support this speculation.

Good post Terraplane, assuming you were aiming for 100% fatuous opinion.

"Great news, should've happened at least 5 years ago."

Haha Du Plessis has only been at BT for 4 years, are you saying he should have left before he started? Apparently a time paradox can be Universe ending!!!

"Maybe he can give a statement, but there again he remained anonymous throughout his tenure."

The only story around Du Plessis, I can recall, was his disagreement with Jansen over cutting the dividend. Looks as though Jansen won that argument, on the back of Covid.

https://www.telegraph.co.uk/business/2019/05/04/bt-board-row-future-dividend/

What I'll be interested in, is seeing how fast the replacement is announced, and where they come from. It's possible this is scripted, and everything's in place for a quick known replacement. Sometimes a change of Chairman, or CEO, pre-empts takeovers or mergers, although I couldn't imagine any company being allowed to takeover BT, a merger is a possibility.