Reply to post: Re: I work for BT

Shocked, I tell you. BT to write off £530m over 'improper' Italian accounts practices

Anonymous Coward
Anonymous Coward

Re: I work for BT

1. Failure to convince you. Sure - some people will always believe the worst, I understand that. Some people inherently believe that corporations are like Lord Business in the Lego Movie; each to their own political/economic views.

2. Scale/pervasiveness of misconduct. I did not suggest that it was only lower management: you are creating a (no doubt cathartic) strawman argument to validate your preconceptions. I did suggest that it was a limited number of people. The FT reporting is interesting in who it names, but it too must be necessarily speculative at this stage. I repeat what I said first: "Italian prosecutors have begun an investigation... Thorough criminal investigations now need to be conducted. Hopefully a just outcome will follow in due course - which might involve imprisonment... Let's see what prosecutors make of this..."

3. BT/Openreach split. I have yet to read any convincing arguments why splitting Openreach from BT will create investment incentives for FTTP. On the contrary, deliberately weakening both organisations will further reduce their ability to raise, and invest, funds. As a detailed Haitong analysis warned earlier this month:

"** Investment summary ** (extract from lengthy document)

Over the course of 2016 Ofcom (egged on by SKY, TALK and VOD) conditioned UK politicians of all persuasions to expect a very large increase in capex to build Britain much more all-fibre connectivity. Indeed the regulator set this to be its core aim for the next decade. However the regulator neglected to explain to legislators how this extra investment will be paid for, and they did not ask about this either. In addition, we think Ofcom has been taken in by SKY, TALK and VOD. All three companies talked passionately and often about the societal benefits of all-fibre infrastructure, but all three are now unwilling to invest meaningfully to help realise this dream for Britain. Therefore Ofcom is very exposed, politically.

...

TalkTalk's all-fibre build in York is little more than an expensive Public Relations exercise because of the following:

- ‘Stage 1’ of the build was to have reached 20k premises but ended at 14k.

- TALK said capex is £417/home passed but its partner, CityFibre, says this is >£600. Also the latter excludes network electronics costing another c.£75/home passed.

- TALK plans to spend “approximately” £20m more and take 1.5 years to reach 40k homes more. But this is just 0.1% of all UK premises.

- Despite TALK’s enthusiasm about this experiment in York, SKY chose to exit the project

- TalkTalk's last net debt/EBITDA was 2.8x (as at 30 September 2016) and the company’s dividend is uncovered.

...

Given the sum of the above, we believe Ofcom needs to explain urgently and fully why it has yet to agree with BT how to reform Openreach’s governance. If SKY, TALK and VOD are unwilling to help build Britain more fibre, it makes no sense for the regulator to keep hounding BT which continues to serve this country very well (as evidenced also by Ofcom’s own “Communications Market Report – International” published just three weeks ago...)"

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