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Personally don't agree with this level of rise at BT or any other company. I would rather see a one off payment and then say review the following year when inflation should be less.
If energy prices resolve and return to norm, then surely production costs should also come back down and we should see lower prices in the shop. If this were to happen are people going to hand back there huge rises?
Don't forget the government gave everyone £400 so take £400 off any wage settlement.
There was talk of Openreach reducing costs to compete with the Altnets, as for the satellites I agree and don't see the need in populated areas. Points are,
1. How do you get a Starlink dish on the outside of your property, particularly those in flats? Sky are dumping the dish to go via the Internet - that says something. My dish always gave a rubbish picture when it was raining.
2. Is low earth still not about 500Km, so up and down that distance latency will a lot worse than getting you to your local UK host/cache site.
3. If fixed lines are at risk then why has everybody not shifted to 5G?
4. With fibres, there are less connections and POPs to traverse. With these satellites they are putting up thousands. It is going to be a nightmare keeping that network up to date.
5. I don't see Amazon, Netflix launching satellites to provide cache's in space so Starlink must tap into the Internet on the ground.
Personally I want to see large providers pay for core usage. I don't know exactly how it works but you buy a streaming service, drag all that data across local Telco, and the people who get the subscription money are Netflix, BBC etc. They may have a big pipe to dump the content from where ever but that doesn't have to go via BT or Vodafone. Sound right?
A bit like foreign lorries using our roads but paying no road tax to maintain it.
Just some small pros and big cons observations on the pension fund.
Positively I had high hopes we would be in surplus for the next valuation at June 2023, i.e. we were only at a 1.1Bn deficit at March 2022 and with a further 900M to be added ahead of the review it looks like the fund could be full funded much sooner than the planned 2030.
Other small pro's were,
Section A and B increases are limited to CPI, BT holds gov index linked bonds which are on RPI (although RPI is to aligned to CPIH in 2030). RPI is usually 1% higher than CPI so +++
Section C (about 1/4 of the people) are linked to RPI, but limited to a 5% max increase and with RPI being much higher, this again must be a win for the BTPS. +++
However, 30% of the fund is in Corp and Gov Bonds, which are affected by interest rates. As an example 15Bn is supposed to be in corporate bonds and the UKs bond index has fallen 23% as interest rates rise to combat inflation (thanks Mr Putin). ---------
Next June's 3 year valuation should be interesting.
Although dishearten by the price I too bought more as the dividend rate is good and I can only see this improving as costs reduce and copper is phased out. I don't need the money for a while so happy to accept things go up and down, with a potential bonus of a takeover, just don't look daily which is why I am not on hear much.
If you look around Europe, this year the DAX is down 25% and other Europeans around 20 or 15%, the FTSE 8%, perhaps as the FTSE was already cheap and BT is just peanuts (in my view).
Personally would love to see OR split out. I believe they hamper BTGS, as an ex-BTGS employee, for years we had positive discrimination from OR so we could not be seen to have an advantage but then have our own products restricted to OR services when other Telco's could offer cheaper services. Crazy setup.
Also just witnessed BT install fibre in our street after CityFibre were here a few years ago. They did a much better job and didn't kill my line, along with several other in the street, like City managed. Good to see BT were laying proper ducting, I don't remember City putting down ducts.
"Nearly a third of Britain's telecoms customers – some eight million households – are finding it difficult to pay for their phone, broadband, pay-TV and streaming, according to telecoms regulator Ofcom."
I would say pay-TV and streaming are not essential.
I think OFCOM need to get a reality check as stupid statements like above make their arguments look invalid.
Perhaps they need to offer suggestions on how companies validate and keep track of who qualifies so the system is not abused. Forgetting politics, you can't just base it mearly on someone qualifying for benefits as some of those people are better off than those working.
Sorry if i missed this but read article today that BT pension deficit slashed by 4Bn down to 1Bn.
https://www.pensions-expert.com/DB-Derisking/BT-slashes-pensions-deficit-by-4bn-in-one-year?ct=true
May explain why my BT DB scheme transfer out value tanked another 10%, and down 25% in 5 months.
Again don't understand bt exposure to Russia, from 10 years ago I don't remember much infrastructure/pops in country, and local suppliers would provide tails in country. How BT pays Russian telcos could be problematic but they make defer payments in the short term. Given the cyber threat I would expect global services to be getting more interest or even corporates seeing cloud services more positively as a way to mitigate their risk. BT is pretty green so doubt energy prices should significantly hurt them compared to manufacturing.
Can you provide any figures to justify £5 or why OR alone is worth £30Bn? Thanks.
I am in two minds whether to sit on this for another 6 months till Drahi position is better known, or sell some and come back on St ledgers day. I have a lot of profit to take and see other opportunities on recovery of other covid affected companies that may provide a bigger shot over the next 6 months.
If only BT could have invested some of the pension fund in their own share at £1 then things would be much more happy.
p.s. BT reduced pension transfer out rates by up to 10%. Now only looking at 25x pension to leave. Are they happier with the pension deficit?