RE: Super Deduction4 Mar 2021 13:36
Larry. “ 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)”
Yes it could impact on profit over that period, but, it is £1b that can be spent that is over and above the estimated cost of FTTP and 5g rollout. If you take the current time plan for completion we are looking at around 2025-2026, after which costs will reduce at a pace in the following few years. Very little cost in additional network build after that, reduction in staff and there costs and a reduction in buildings and there related costs. So if they have an additional £1b they could spend effectively for free, reduce network upgrade by maybe 12-18 months, then the expected savings at the end of the original timescale start earlier, profit growth could start earlier and rise quicker than planned. A short term drop in expected profit to enable a quicker network build time makes sense, I can see no obvious reason not to look very hard at this as the potential to deliver better profits sooner with almost no additional costs if planed correctly. IMO