Kitz Forum
Announcements => News Articles => Topic started by: Black Sheep on January 15, 2016, 08:49:25 AM
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Another BT milestone: CMA approves EE acquisition
I'm delighted the Competition and Markets Authority has today given unconditional approval for BT's acquisition of EE, having unanimously found there to be no significant lessening of competition.
This is fantastic news and a huge milestone moment for us all. Separately, both companies have achieved great things and together we will be one of the world's leading communications providers.
We now need to start the formal process of completing the deal, which we expect to do by the end of the month. Therefore, the first steps in our plan to incorporate the EE business into the wider BT Group will begin in early February.
At that point, we'll be bringing together two similar cultures of innovation, two businesses of like-minded people. I look forward to us building on the best that both organisations have to offer and creating a future where we can provide customers with truly seamless connectivity; build the fastest, most connected and most reliable network and transform the shape of communications by creating more innovative, converged products and services our customers want.
You’ll see more information over the coming weeks. In the meantime it’s business as usual and we must focus on closing the financial year in a strong position. For now, I want to thank everyone who’s worked so hard to get us to this point. It’s a great achievement, and there are even greater things ahead for all of us – for our shareholders, for us and above all, for our customers.
I look forward to welcoming EE into the BT family.
Gavin
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BT deal to buy German-French mobile venture is cleared
Germany's Deutsche Telekom and France's Orange S.A. say the sale of their mobile joint venture EE to British telecommunications company BT PLC is going ahead.
The two companies said in a joint statement Friday that the British Competition and Markets Authority had granted its final approval to the deal valued at 12.5 billion pounds ($17.95 billion) without conditions.
The deal, which will be closed at the end of the month, will give BT access to EE's 31 million customers.
According to previously announced details of the transaction, Deutsche Telekom will get new shares equal to 12 percent of BT and a small cash payment, while Orange will receive a 4 percent stake and 3.4 billion pounds in cash. Deutsche Telekom will also gain a seat on BT's board.
Read more at: http://phys.org/news/2016-01-bt-german-french-mobile-venture.html#jCp
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Funny I dont see EE and BT as similar cultures and as a EE customer this worries me.
EE lead the way in the UK with their investment in capacity and new technology.
Whilst BT is a company that clings onto older technology for as long as possible to maximise profits for its shareholders, the cultures clash and hence me been worried.
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We'll have to re-visit this thread in a few months to see if your fears are well founded .................. or not.
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I'm not really worried, but disappointed that through no fault of my own my ISP (Plusnet) and mobile provider (EE) will both be part of BT.
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Ha ha , are you 100% sure it wasn't down to you, Mr Candles ?? ;D
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Well, I suppose it's possible I may have said the wrong thing last time I had lunch with Mr Swantee. :-\
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I'm waiting to read N*Star's opinion on the acquisition, knowing that he migrated to EE from BT. :-\
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I'm waiting to read N*Star's opinion on the acquisition, knowing that he migrated to EE from BT. :-\
TBH I dont think it will make that much difference.
EE's DSL is a white label BTw product. All the White label products are provisioned as WBMC but BTw own things such as the gateways and MSILs and dictate any routing etc. It is designed for companies that dont want to have any control over any equipment. In theory it gives BTw more control over the backhaul and core than say WBMC shared who purchase their own host links. BTw do everything.
My guess would be in time the broadband could actually become a white label Plusnet product (ala John Lewis etc). It does seem rather a convenient co-incidence that EE are actually acquired one week after PN go dedicated.
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This is absolutely terrible for the consumer. EE innovate, BT don't.
Just look at O2.
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I'm waiting to read N*Star's opinion on the acquisition, knowing that he migrated to EE from BT. :-\
Was with BT broadband & telephone for close to 3 years using this new FTTC service and had no issues apart from the price of the 40/10 40GB usage allowance and phone was only free at evenings & weekends and no amount of negotiation would change BTs mind to lower the cost only if I was a new customer ::)
Moved to EE with 40/10 unlimited with free 24/7 calls to land lines 1hr max calls ! a saving of £7 per month and a free VDSL modem with a nice chipset broadcom 63168 and again no issues.
The only worry I have with this acquisition is will there to any price changes in the future.
I'll always go for the cheapest ISP/Telco rather than it's brand name or how well it does on customer service surveys.
Give me LLU at the local exchange and i'll be even happier ;)
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To my mind I think this merger is a huge reason now to split OR from BT. There can be NO justification now for anything less. BT + EE + OR is just too big and too much of a monopoly to be left as it is currently. No amount of Chinese walls will give any confidence whatsoever that there would be no preferential treatment to the rest of the BT group if OR is left as part of BT. OFCOM is simply not powerful enough to control BT with OR as an integral part.
Stuart
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To my mind I think this merger is a huge reason now to split OR from BT. There can be NO justification now for anything less. BT + EE + OR is just too big and too much of a monopoly to be left as it is currently. No amount of Chinese walls will give any confidence whatsoever that there would be no preferential treatment to the rest of the BT group if OR is left as part of BT. OFCOM is simply not powerful enough to control BT with OR as an integral part.
Stuart
Although they are under the same 'Umbrella' they will still operate as individual entities. With that in mind, Openreach will still continue to be scrutinised by Ofcom regarding their 'Undertakings' and 'Equivalence of Inputs'. Nothing has changed on that front whatsoever.
What are 'Undertakings' ??
These are a set of legally-binding obligations that BT has given to Ofcom (the Office of Communications) the regulator for the communications industry. There are around 250 separate undertakings, and some of the key ones have resulted in the creation of Openreach and the introduction of Equivalence.
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I am sorry to say OFCOM is as useless as an empty roll of toilet paper when you need it most and as EU customer I what to say it's all a farce OFCOM have made things worse
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Well, it's all done with now. No going back. I'm a big believer in seeing the results, be that positive or negative, before judging things.
Otherwise, it's just an opinion at best.
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Well, it's all done with now. No going back. I'm a big believer in seeing the results, be that positive or negative, before judging things.
Otherwise, it's just an opinion at best.
If you said this acquisition will benefit the customers by lowering monthly charges and also making the line-rental half price then it would be a good day the only people who will see any benefit will be those share holders you know that to be true.
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Absolutely agree, it'll be great for shareholders, hopefully. As for the rest of what will happen, who knows ?? You don't, I don't ..... only those at the top of the business do ..... ergo, it's just an opinion.
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Absolutely agree, it'll be great for shareholders, hopefully. As for the rest of what will happen, who knows ?? You don't, I don't ..... only those at the top of the business do ..... ergo, it's just an opinion.
Although you are correct it is an opinion, the point here is that just about every merger of this type in the past has NOT resulted in a better deal for consumers and I have no reason to believe that this one will be any different. Based on past experience you must be able to see why people are very skeptical about this one, it might just be no worse than before but I certainly dont see it being any better.
As to OR being part of BT to my mind it should NEVER have been allowed in the first place, it was the wrong decision and I dont think we are seeing any benefit from it being part of BT.
Stuart
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>> f you said this acquisition will benefit the customers by lowering monthly charges and also making the line-rental half price
Wont happen. Broadband is already sold for less than what it costs the providers. The profit is in line rental and its that which subsidises DSL.
OFCOM fixes the BTw line rental prices, and even so if it was half price, then they would be operating at a loss. I dont like how so many companies use line rental subsidisation and it only serves to confuse.
People say BT are too big, but Sky isn't too far behind. Sky is the major player wanting BT broken up.
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For those that see BT as a company run just for wealthy shareholders, why not cash in? Become a shareholder, easily done with a few click of the mouse on various online brokers. :graduate:
Personally, with a small BT shareholding dating back to the original privatisation I'd advise caution, unless you've done all your homework and have very specific reasons for your beliefs. They have had ups and downs in recent years. But over that entire period, since privatisation, it is worth comparing share price vs indexes or inflation - form your own opinions. :-\
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The profit is in line rental and its that which subsidises DSL.
OFCOM fixes the BTw line rental prices, and even so if it was half price, then they would be operating at a loss.
Why then does the line rental prices keep increasing each year I have never seen in my lifetime the line rental price fall unlike like say your oil for heating or electricity or petrol and council rates, that is what gets me BTw or Retail prices just keep on climbing.
Sure the oil producers are now operating at a loss but who cares as long as it's cheaper for the consumer ;D
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I daresay I agree with those who think it could be a bad thing. EE are innovators and I have concerns that BT will stifle that innovation.
Conversely EE could have a positive effect on BT.
As has been said I will also wait and see what happens
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People say BT are too big, but Sky isn't too far behind. Sky is the major player wanting BT broken up.
While I agree with this my point about BTOR needing to be separated from BT is because in fixed line terms they own the vast majority of the estate and therefore effectively control the supply of fixed line telephony and broadband market. Allowing one company to own this while supposedly competing with others who have no alternative but to use OR is just plain wrong. I simply do not accept that this can be 100% fair or 100% transparent, I'm not saying they deliberately do bad things but is just too easy for things to go awry. A separate company would allow the possibility to rebuild the trust of the public in this market operating fairly.
Stuart
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A simple example is the way OR crippled G.INP because BT are supplying a modem/router that doesn't support it.
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A simple example is the way OR crippled G.INP because BT are supplying a modem/router that doesn't support it.
Surely that's an example to prove that the two are not in cahoots with each other, whispering in darkened corners, etc ???
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To me, it shows that OR still works in BT's interest. OR crippled G.INP for everyone because BT don't support it.
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Why then does the line rental prices keep increasing each year I have never seen in my lifetime the line rental price fall unlike like say your oil for heating or electricity or petrol and council rates, that is what gets me BTw or Retail prices just keep on climbing.
The wholesale prices for line rental are falling as per Ofcom's price controls - the retail line rental is increasing for two main reasons:
1) call revenue if falling;and
2) providers find it easier to raise line rental than broadband prices.
However, its possible to shop around and find providers who are charging less in line rental than the likes of Sky and BT.
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A simple example is the way OR crippled G.INP because BT are supplying a modem/router that doesn't support it.
Surely that's an example to prove that the two are not in cahoots with each other, whispering in darkened corners, etc ???
If OR was a separate company they would have said to BT 'hard luck you fix your problem'.
Stuart
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A simple example is the way OR crippled G.INP because BT are supplying a modem/router that doesn't support it.
I thought OR actually did that as some of the FTTC modems OR supplied don't support G.INP properly not because BT Retail have issues.
Though both could be resolved with a firmware update.. its probably harder for Openreach as they don't want to support the FTTC routers they issued any longer
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The profit is in line rental and its that which subsidises DSL.
OFCOM fixes the BTw line rental prices, and even so if it was half price, then they would be operating at a loss.
Why then does the line rental prices keep increasing each year I have never seen in my lifetime the line rental price fall unlike like say your oil for heating or electricity or petrol and council rates, that is what gets me BTw or Retail prices just keep on climbing.
Sure the oil producers are now operating at a loss but who cares as long as it's cheaper for the consumer ;D
Youre pointing the finger totally in the wrong direction. The wholesale prices are not climbing.
It is absolutely nothing to do with Openreach or Wholesale. Blame the Service providers. The basic price charged by Openreach/Wholesale has actually decreased over the past 10 years. In 2006 the Service providers were charged £100-68. Today they are charged £86.72 for line rental and its the ISPs who are making huge price increases.
Its the service providers who started offsetting broadband by line rental who are to blame for this one. TalkTalk started the ball rolling with "Free broadband" if you take line rental.
It is the service providers themselves who are hiking the line rental prices sky high [pun].
This is why I am so against price offsetting of broadband, most consumers dont look at the line rental cost and go for the headling 'Free broadband' or 'broadband for £2.99'.
IMHO it would be far more useful if OFCOM investigated the Service Providers for price offsetting and would make things much simpler and cheaper for consumers. Its the price offsetting which has helped to make the likes of Sky/TT bigger and why theres less of ISPs such as Zen in the market place.
Attached below is the wholesale line rental costs for the past 10 years.
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I don't know how there is even any dispute that BT are going to {censored} up EE.
O2 they {censored} up, their network is in a terrible state, largely in part to no investment and money grabbing from BT before they sold it off.
FTTC. A half-arsed solution to a problem that already had good solutions.
Openreach. A half-arsed solution to a problem which already had good solutions.
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To me, it shows that OR still works in BT's interest. OR crippled G.INP for everyone because BT don't support it.
False. g.inp isnt crippled. Its still there for those on the Huawei cabs if the line needs it. Gawd knows what is going on with the ECI cabs though.
This is more to the fact that ECI modems supplied by Openreach doesnt support it. If half the userbase had ECI modems then they had to do something.
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People say BT are too big, but Sky isn't too far behind. Sky is the major player wanting BT broken up.
While I agree with this my point about BTOR needing to be separated from BT is because in fixed line terms they own the vast majority of the estate and therefore effectively control the supply of fixed line telephony and broadband market. Allowing one company to own this while supposedly competing with others who have no alternative but to use OR is just plain wrong. I simply do not accept that this can be 100% fair or 100% transparent, I'm not saying they deliberately do bad things but is just too easy for things to go awry. A separate company would allow the possibility to rebuild the trust of the public in this market operating fairly.
Stuart
My confusion is why should only rules apply to BT. BT has 6 million retail customers and Virgin has about 5 million. Why isnt the Virgin Network made open up their backhaul. Why arent they also made to separate wholesale and consumer? What about sky's dominance in the satellite service now that triple play and quad play packages are being bundled. TBH I think there is a huge amount of manipulation going on :-\
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I don't know how there is even any dispute that BT are going to {censored} up EE.
O2 they {censored} up, their network is in a terrible state, largely in part to no investment and money grabbing from BT before they sold it off.
FTTC. A half-arsed solution to a problem that already had good solutions.
Openreach. A half-arsed solution to a problem which already had good solutions.
Really?
O2 demerged from BT in 2001 - if they have any problems now,I doubt they can be laid at BT's feet given 15 years have passed - and o2 have been owned by Telefónica since 2005. IMO BT actually crippled the rest of their business by writing off all of o2's debts before they let them go.
Rolling out FTTC is a perfectly rational choice - certainly more so than rolling out FTTP to everyone which would take longer and be more expensive.
The creation of Openreach was caused by Sky etc. wanting to harm BT - the same reason they want it totally separated now. The competition don't give a toss about new products, lower prices for consumers or better services. Separating OR wil just mean they won't be able to afford to make large new investments like FTTP and G.Fast which they can do as part of BT.
I'm not saying BT are going to make a success of EE - too early to say. The big risk in my own mind is actually to BT since France Telecom/DT will now own 15/16% of BT and have a seat on the board...
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For those that see BT as a company run just for wealthy shareholders, why not cash in? Become a shareholder, easily done with a few click of the mouse on various online brokers. :graduate:
Personally, with a small BT shareholding dating back to the original privatisation I'd advise caution, unless you've done all your homework and have very specific reasons for your beliefs. They have had ups and downs in recent years. But over that entire period, since privatisation, it is worth comparing share price vs indexes or inflation - form your own opinions. :-\
My family already are shareholders :p
One of the best bets in terms of UK companies, as this company very strongly puts shareholders first.
Also price isnt everything, EE's approach I liked, they are not the cheapest mobile provider, they dont try to hide that, but they cost more because they invest more, they built the best UK mobile network with that revenue.
The CEO when he came to this country blogged about how bad the UK culture was in terms of technology progression.
The warning signs are already here, BT mobile has already started months ago and the packages are way more generous than EE which indicates a pile it high strategy is going to be used.
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People say BT are too big, but Sky isn't too far behind. Sky is the major player wanting BT broken up.
While I agree with this my point about BTOR needing to be separated from BT is because in fixed line terms they own the vast majority of the estate and therefore effectively control the supply of fixed line telephony and broadband market. Allowing one company to own this while supposedly competing with others who have no alternative but to use OR is just plain wrong. I simply do not accept that this can be 100% fair or 100% transparent, I'm not saying they deliberately do bad things but is just too easy for things to go awry. A separate company would allow the possibility to rebuild the trust of the public in this market operating fairly.
Stuart
My confusion is why should only rules apply to BT. BT has 6 million retail customers and Virgin has about 5 million. Why isnt the Virgin Network made open up their backhaul. Why arent they also made to separate wholesale and consumer? What about sky's dominance in the satellite service now that triple play and quad play packages are being bundled. TBH I think there is a huge amount of manipulation going on :-\
I think BT are a much more dangerous proposition than sky, what infrastructure do sky own that is hard to duplicate? Nothing. Their assets is sports rights which have to be renewed very frequently, BT quite easily made a big bite into those rights when they decided to get interested. Sky are now in a bad position, BT been involved made them grossly overpay for the next EPL rights e.g.
Meanwhile BT own a national local loop infrastructure (hull excempted) that is incredibly expensive to duplicate, the companies that built the cable network which VM now owns went bankrupt doing so. They have an effective monopoly which ofcom has falsely painted as competitive. Because of this e.g. they are able to ignore the weak regulation on line rental by making the lost revenue back by raising their retail line rental prices, the other companies jumped in on the act by making sure they only slightly undercutting BT and ofcom have somehow classed this as acceptable for the consumer market.
The separation of openreach is not a true separation, one has to be (been blunt) quite ignorant or silly to really believe that business decisions made by openreach have absolutely nothing to do with its parent company. e.g. When BT retail decided they need to market higher than 24mbit/sec by coincidence openreach decides to roll out FTTC. BT retail are happy to use DLM, by coincidence thats all openreach provide. Also its a false picture to claim sky are alone in wanting openreach broken up. There is sky, vodafone and talktalk, as well as many consumers. All ofcom require openreach to do is offer the same product to other companies that BT retail uses, thats it. There is no obligation on openreach to provide a product that BT's competitors ask for.
Sky may well not be totally honest in their public statements, however they are right on the following things.
Openreach investment is a pittance when compared to its operating revenue.
Openreach service quality level's are one of the worst in the world.
Openreach wont adapt their product offerings to what non BT customers are asking for.
BT now have 30+ million customers, that completely towers over what sky have.
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People say BT are too big, but Sky isn't too far behind. Sky is the major player wanting BT broken up.
While I agree with this my point about BTOR needing to be separated from BT is because in fixed line terms they own the vast majority of the estate and therefore effectively control the supply of fixed line telephony and broadband market. Allowing one company to own this while supposedly competing with others who have no alternative but to use OR is just plain wrong. I simply do not accept that this can be 100% fair or 100% transparent, I'm not saying they deliberately do bad things but is just too easy for things to go awry. A separate company would allow the possibility to rebuild the trust of the public in this market operating fairly.
Stuart
My confusion is why should only rules apply to BT. BT has 6 million retail customers and Virgin has about 5 million. Why isnt the Virgin Network made open up their backhaul. Why arent they also made to separate wholesale and consumer? What about sky's dominance in the satellite service now that triple play and quad play packages are being bundled. TBH I think there is a huge amount of manipulation going on :-\
I think BT are a much more dangerous proposition than sky, what infrastructure do sky own that is hard to duplicate? Nothing. Their assets is sports rights which have to be renewed very frequently, BT quite easily made a big bite into those rights when they decided to get interested. Sky are now in a bad position, BT been involved made them grossly overpay for the next EPL rights e.g.
Meanwhile BT own a national local loop infrastructure (hull excempted) that is incredibly expensive to duplicate, the companies that built the cable network which VM now owns went bankrupt doing so. They have an effective monopoly which ofcom has falsely painted as competitive. Because of this e.g. they are able to ignore the weak regulation on line rental by making the lost revenue back by raising their retail line rental prices, the other companies jumped in on the act by making sure they only slightly undercutting BT and ofcom have somehow classed this as acceptable for the consumer market.
The separation of openreach is not a true separation, one has to be (been blunt) quite ignorant or silly to really believe that business decisions made by openreach have absolutely nothing to do with its parent company. e.g. When BT retail decided they need to market higher than 24mbit/sec by coincidence openreach decides to roll out FTTC. BT retail are happy to use DLM, by coincidence thats all openreach provide. Also its a false picture to claim sky are alone in wanting openreach broken up. There is sky, vodafone and talktalk, as well as many consumers. All ofcom require openreach to do is offer the same product to other companies that BT retail uses, thats it. There is no obligation on openreach to provide a product that BT's competitors ask for.
Sky may well not be totally honest in their public statements, however they are right on the following things.
Openreach investment is a pittance when compared to its operating revenue.
Openreach service quality level's are one of the worst in the world.
Openreach wont adapt their product offerings to what non BT customers are asking for.
BT now have 30+ million customers, that completely towers over what sky have.
I could not agree more with your summary on this. I do have sympathy for Black Sheep's position as BT or part of it pay his salary so he is between a rock and a hard place in these discussions. However I can see no logical reason for NOT splitting OR from BT completely as I have repeatedly said. The current position is untenable.
Stuart
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Do we think OR is likely to be separated at this point?
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Sky may well not be totally honest in their public statements, however they are right on the following things.
Openreach investment is a pittance when compared to its operating revenue.
This statement made me have a look at BT's annual report.
In it, Openreach report:
Annual Revenue of 5,011m
Capital Expenditure of 1,082m
20%+ isn't a pittance - however, its wrong to compare the two figures in principle anyway - as annual revenue excludes things like operating costs and taxes
Comparing the capex to the Operating profit of 1,252m is probably a better metric.
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Do we think OR is likely to be separated at this point?
I doubt it.
A separate OR would likely inherit the bulk of BT's pension liabilities for one thing. For another, I think that most who examine the issue realise OR doesn't have the resources to rollout FTTP/G.Fast on its own (its cost of funding would be higher than BT) and others will be keen to avoid a Railtrack type disaster.
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My view is plain and simple that I dont feel it would bring any benefit to the state of broadband. It wont roll out FTTH any faster. Of course the likes of of Sky and TT want it pulling to pieces. The fact is there are companies out there who want access without investment. Im suspect of things that get reported in the media especially when much of the control is under the Murdoch empire. Heck we all saw what happened just this week with the Murdoch empire trying to influence the UK public opinion on the doctors strike.
The grass is always greener on the other side and I dont believe it will make things any better, the only people who will benefit are laywers and accountants. Not us.
IMHO there are far more important things that could be done such as Openreach accountability and communication to the EU. ISPs also need a more direct communication and accountability with Openreach. What happens with the backhaul and BT wholesale. This is what we should be concentrating on as splitting it up wont make that any better. The 'mistake' was selling off Openreach in the first place, but what is done is now done and it is a company that has to have profits and are accountable to their shareholders.
Yes its fun to slate Openreach or BT and I do it too when deserved, and its easy to say they should have gone straight to FTTP rather than FTTC despite it not being economically viable (that argument has already been done to the death!!!) but I really cannot think of any organisation that could have done it any better way based on the geographic problems that we have in the UK. If vodafone or sky could have done it any better then they could have put their money in... but they are only interested in the profitable towns and cities.
I think that most who examine the issue realise OR doesn't have the resources to rollout FTTP/G.Fast on its own
This ^
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As for splitting OR from BT I think no. Where would the investment come from apart from increased prices?
Back to the original topic - as to the BT acquisition of EE I’m in “the wait and see” corner at the moment. But I did have an interesting conversation with a lady from the BT retention team last evening. We touched on mobile phones and she seemed to think that there would be some good deals for BT customers once they hit the high streets.
If that’s the case I’m all for it as a BT customer. And why not it’s got to be good for their customers and their business.
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Kitz you got anything to backup FTTP not been viable? because facts from other countries say otherwise.
FTTP is viable providing the shareholders can accept the reduced profits in the short term.
pooclah if the only thing you care about is low prices then maybe.
Think of the situation now, the bundling, the penalties for not bundling. Do you think EE customers who "dont" have BT broadband or BT line rental will be better off?, no we would be subsidising those with bundles. do you think EE will continue to innovate and invest in high capacity compared to their competition?
Kitz sorry but openreach really are that bad.
4+ weeks for installations.
Threat of fee's for a fault callout.
No same day callout's for consumers.
Unable to coordinate end user equipment to match street equipment.
Engineers failing to turn up.
Voice engineers turning up for broadband faults.
Cancelled appointments.
Having an extremely low standard for what passes as a working service.
They cant even rollout FTTP properly, having to put FTTPoD on hold and have FTTP orders lingering for several months.
I think you getting your emotions mixed up with what you think of murdoch vs sky as a company. Sky as a company compared to BT is not even in the same league in terms of size, grip on the market and influence on telecoms.
You say openreach need more accountability (which I agree), but then you fail to realise why we got in this position, because BT and openreach are the same company, ofcom forced a sort of artificial split and this meant openreach no longer have direct accountability because ofcom specifically didnt want them dealing direct with consumers.
If openreach was a completely separate company then ofcom are more likely to back out of that artificial arrangement and as such accountability could increase.
Pooclah the investment would come from openreach's profit and increased prices (yes wholesale prices are too low in my opinion).
Really ofcom only need to do 3 things and everything would be much better.
Split off openreach as a new company.
Regulate retail instead of wholesale. (this includes stopping misleading pricing).
Encourage investment instead of a race to bottom in prices.
Both sky and vodafone have said they would be shareholders of the new company and directly finance a better infrastructure. http://www.theguardian.com/business/2015/jul/24/vodafone-shareholder-company-replacing-bt-openreach-fibre-optic
What they dont want to do is rent of openreach to finance BT retail.
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Sky may well not be totally honest in their public statements, however they are right on the following things.
Openreach investment is a pittance when compared to its operating revenue.
This statement made me have a look at BT's annual report.
In it, Openreach report:
Annual Revenue of 5,011m
Capital Expenditure of 1,082m
20%+ isn't a pittance - however, its wrong to compare the two figures in principle anyway - as annual revenue excludes things like operating costs and taxes
Comparing the capex to the Operating profit of 1,252m is probably a better metric.
2.5billion over 5 years is a pittance.
That capital expenditure isnt all what it seems.
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Kitz sorry but openreach really are that bad.
4+ weeks for installations.
Threat of fee's for a fault callout.
No same day callout's for consumers.
Unable to coordinate end user equipment to match street equipment.
Engineers failing to turn up.
Voice engineers turning up for broadband faults.
Cancelled appointments.
Im afraid I disagree. I dont see how splitting them off will specifically tackle these issues. They should be tackled regardless.
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Because openreach would be focusing on itself instead of worrying about BT, and sky and vodafone would get these tackled as it is negatively affecting their own companies.
Also because openreach revenues wont be been used to fund BT sports rights, meaning they can spend on more engineers for a better service instead.
If I am wrong why are BT so desperate to keep hold of openreach? You are seemingly saying openreach is just trouble having to do unviable rollouts of new infrastructure, why would BT want to keep such a company?
Anyway we will agree to disagree.
Like everyone has said time will tell on the EE buyout. I hope I am proven wrong because I dont want to have to leave EE.
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Its the mess that would occur during a split. As mentioned the beneficiaries would be lawyers and accountants. How would they deal with BTw. Its already a nightmare with Openreach ->, Wholesale, ->, SPs -> EU.
No other company has to split off their retail & wholesale. What about Virgin?
You are seemingly saying openreach is just trouble having to do unviable rollouts of new infrastructure,
No I've said why its unviable to fully roll out FTTH to the whole country. Remember that guy form JT slagging off BT for not following Jersey Telecoms footsteps, even thought they dont have the same demographics and were half sponsored by Jersey gov. Even their best laid plans hasnt gone as anticipated.
Im saying that I dont believe a split would suddenly make everything better.
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Im afraid I disagree. I dont see how splitting them off will specifically tackle these issues. They should be tackled regardless.
I agree it should be tackled but I think while BT shackles them it wont, there is no will in BT to do this as it will help their competitors.
Stuart
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FTTP should be where its profitable not nationwide, I never said it should be everywhere, I dont think any of sky, Vodafone etc. say so either, its ofcom and BT who are obsessed with giving little villages the same service as cities.
As for virgin media they dont have a presence all over the country the same AS BT as such they have no monopoly, because where they exist they have competition from another infrastructure.
BTw can stay how it is, isp's can already bypass BTw anyway so its not a big issue, e.g. as a sky customer I dont use BTw backhaul.
Openreach is rotten because it has the mindset of BT drilled into it.
Sky and talktalk have been trialling FTTP, they have obviously concluded the cost of rolling it out in cities like york is low enough that g.fast is a waste of time in such areas.
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@Kitz
> No other company has to split off their retail & wholesale. What about Virgin?
I think it's very unfair on BT. But I would have to say, my mind went in the opposite direction. What if all companies that had a monolopoly or near monopoly were required to produce a price list under certain conditions?
(With much respect for your options,)
> saying that I dont believe a split would suddenly make everything better
Agreed. Chaos, and expensive chaos. God knows what would happen to faults, complaints and account changes, ISP migration and new lines. It would just be the equivalent of throwing a handgrenade into a working, tested system
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Chrysalis,
Because openreach would be focusing on itself instead of worrying about BT, and sky and vodafone would get these tackled as it is negatively affecting their own companies.
Also because openreach revenues wont be been used to fund BT sports rights, meaning they can spend on more engineers for a better service instead.
If I am wrong why are BT so desperate to keep hold of openreach? You are seemingly saying openreach is just trouble having to do unviable rollouts of new infrastructure, why would BT want to keep such a company?
As Kitz and Weaver has pointed out, separating OR is likely to lead to more confusion and poorer services from both BT and OR while they sort of the mess that will be created which will take years.
BT know this and it is something they will naturally want to avoid.
However, all BT would need to do is adopt an LLU model like Sky and Talktalk and Openreach would then be in considerable difficulty, as would the other ISPs which rely on them.
Also: re: sports rights - a companies revenue is not used to by these - they would come out of cashflow and oeprating profit..much smaller numbers. I seriously doubt OR's income is being used for this purpose anyway - its profit margin as well as its prices are fixed by Ofcom.
its ofcom and BT who are obsessed with giving little villages the same service as cities.
I think you mean Parliament (where MPs have voters to deal with) and thus Ofcom and rather than BT. BT are doing it because they can, I'm sure if they could get away with only upgrading viable parts of their network they would.
Neither would splitting OR fix any of the problems you have listed - though things are much better now than before privatisation.
the investment would come from openreach's profit and increased prices (yes wholesale prices are too low in my opinion).
Higher prices might enable OR to tackle some of the issues you list - it doesn't need to be separate from BT for this. BUT who do you think is going to support higher prices? Not many..
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I think the argument of it been a mess temporarily whilst restructuring takes place is a weak one, long term is always king over short term.
You need to clarify what you mean by confusion.
LLU has absolutely no bearing on openreach, it only affects BT wholesale. Openreach can only be bypassed by building your own local loop.
Finally jacking up openreach's prices and doing nothing else would not achieve much, unless ofcom forced BT to invest it all on openreach infrastructure (which they wont) because BT would just siphon it off to other parts of the company or give it all to shareholders.
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The issue OR face at the moment with all the calls for it to be split off is that the public are sympathetic to those calls, not so much because it makes sense from a commercial standpoint for them to be totally independent of the rest of BT, but because of their current pee poor performance in the areas Chrysalis listed (mainly installation and fault repair). That's making it easy for Sky to gather public support. If OR fixed those issues, Sky would find it a lot harder to get public support for making radical changes.
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Kitz you got anything to backup FTTP not been viable? because facts from other countries say otherwise.
FTTP is viable providing the shareholders can accept the reduced profits in the short term.
Even FTTP masters Gigaclear on their commercial non BDUK projects will not go to outlying houses away from a central "village project".
If such a group happen to be on the fibre in/out route then lucky them - if not tough.
So for example a group of say 4 houses 0.5 miles away on a spur - sorry not interested unless the 4 houses substantially contribute to the cost of getting the fibre to them - and by substantial I'm not talking of £500 - think about another zero on the end for a start - and then add some more; like doubling it.
I know of another example where they said to me that to reach place x is simply not economically viable for us - we go bust. I know the quote they gave the owner and most on here would have a heart attack if they saw it.
Edait
Remember even then GC are only FTTP to the front property boundary. The install costs from there to and inside the house are for the owner to pay on an individually costed basis I think their min 'install' is £100 if you are something like 1 meter away, after that it depends on the length of the drive but for a long rural drive starting thinking in the high £hundreds.
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This got long :-[ And none of it about EE :(
FTTP should be where its profitable not nationwide, I never said it should be everywhere, I dont think any of sky, Vodafone etc. say so either, its ofcom and BT who are obsessed with giving little villages the same service as cities.
I'm not convinced that FTTP is now profitable in many places whatsoever. The rollout of FTTC to the vast majority has removed almost all of the market for customers, and the mere existence of G.fast has brought about a choice that changes the playing field further.
FTTP requires a mindset of long-term investment, long-term assurance of income, long-term risk management (risks=competition,regulation,technology advances). Somewhere in all of this, it requires spending a lot of money, and therefore requires more money coming in from customers - a simple equation.
I don't see that any of those are improved by making Openreach independent - unless Sky and TalkTalk went some way to convince Openreach that there was a stable utopia on the other side, with the prospect of more income.
Unfortunately, Sky went out of their way to demand an independent Openreach with no reduction in regulation, and demands to make things ever-cheaper. TalkTalk just want things cheaper. Neither talk about more money being available from customers.
I understand Sky's position - it is harder to compete with a BT that, at a strategy level at least, controls Openreach. Meanwhile, we need to accept that Sky are simultaneously trying to keep their dominant position in TV by crushing their rival.
If, as a punter, you want cheaper broadband - then follow their cues. But if you want investment in serious infrastructure for the long-term future, then they're not worth listening to.
Right now, I think the country needs the environment for serious investment, rather than an environment for more cut-throat competition, and we need a stable environment for a couple of decades. For that reason, I don't think it is worth paying too much attention to Sky or TalkTalk. It might be worth listening to Vodafone, though ... and the rumours that they're talking to Liberty Global again are interesting. Ironically, you don't see VM calling for Openreach to be split from BT.
For Sky and TalkTalk, perhaps they could achieve a better position, not by fiddling with the only wholesaler they can buy from, but by adding a choice of wholesaler that they can buy from. Forcing VM to offer wholesale services to match those of Openreach & BT Wholesale. That way Sky and TalkTalk would have a choice of wholesale provider - forcing the two main infrastructure competitors into competition.
That sounds like a far better way to get Openreach to react to the needs of their customer better ... by making them fight for that customer!
Not good for VM though. It probably mucks up the financials behind Project Lightning somewhat.
As for virgin media they dont have a presence all over the country the same AS BT as such they have no monopoly, because where they exist they have competition from another infrastructure.
VM is one thing that makes the idea of "monopoly" strange in modern times.
By definition there is no monopoly where VM deploys: BT have no infrastructure monopoly in 50% of the country, rising to ~65% over the next 4-5 years.
But by definition, this ~65% of the country is where profits are possible. So BT have a monopoly only in areas where it is unprofitable to operate. What a privilege that is for them!
Back in GPO days, the proper meaning of the monopoly had a consequence: you could use the profits from the "cheaper" parts of the country to help fund the "expensive", unprofitable parts.
Nowadays, we have lost sight of that consequence. The fact that BT has to compete on price in the competitive 65% means there are no longer the excess funds swashing around the industry to fund the "monopoly" in the remaining 35%.
A lot of people, on many forums, throw around the word "monopoly" for BT. While it is true that BT operate some of their network as a monopoly in the strict sense of the word, they don't operate with any of the financial benefits that normally come with the word. It seems, to me, that the more we add competition into the profitable portion of the country, the more we make it impossible to invest in the unprofitable portion of the country.
Perhaps we need to treat Openreach, and any potential split, in two different ways: one where there is infrastructure competition, and one where there isn't.
Perhaps, in some parts of the 35% "monopoly", the things stifling investment isn't quite the profitability, but the fear, the risk, that a profitable FTTP solution would be undone by VM turning up. Or some other competitor. In this case it is the risk that prevents investment, not the price. For premises stuck like this, would they prefer to see the prospect of investment in FTTP by one company? Or would they prefer competition with lesser technology? Would it be beneficial for a district to be able to offer a limited monopoly (say 10 or 20 years) to an FTTP infrastructure company, allowing for the company to factor reduced risk for payback?
Kitz sorry but openreach really are that bad.
4+ weeks for installations.
Threat of fee's for a fault callout.
No same day callout's for consumers.
Unable to coordinate end user equipment to match street equipment.
Engineers failing to turn up.
Voice engineers turning up for broadband faults.
Cancelled appointments.
I'm with you on this - that Openreach have all these problems that could be improved - but I'm with Kitz on the solution. These are issues to be tackled anyway, with a mindset that wants to tackle them. All of them are issues that show a problem - but they're all a problem that can be solved without being an independent company.
For me, I think they are an endemic problem that stems from a mindset of trying to be cheap, and trying to set up engineers' schedules in a way that is both cheap and EoI-approved, with a limited number of engineers, and a requirement that Openreach not communicate with the end-user.
I think we can see that things haven't worked well on that front, and need to be changed. And they are being changed ... but it takes time for the end result to show through.
But to be world-class in this arena, it takes more engineers, with more time - and that is the biggest cost for Openreach. If we want a better quality service, we need to pay for it. Yet Sky want to keep both the regulation and the cheapness that got us into this mess in the first place. Openreach want to talk to us, but have been vetoed.
In what way would a split solve this differently from just a good kick up the %^&*?
As for the service... How many ISPs tell their punters what SLA they can expect? How many punters know that lines can be taken with different grades of service, at different costs? How many understand the implications of the grade they have chosen? How many, instead, just take the cheapest possible option without a second glance at the consequences?
Perhaps things would improve here is people understood just what grade of service they were signing up to. And saw how much it cost to be offered an improved grade. I still think that Sky's SLA terms (with Openreach) for LLU install/repair are better than the standard WLR terms, but I can't find the document that made me think that, and I can't find details through Sky or Ofcom (where everything is couched in terms of "within SLA").
The dichotomy is that, while an improved access network, and an improved service related to the access network, absolutely requires more money ... Ofcom regulation forces a reduction in this part of "line rental". But punters see their "line rental" increasing, and expect better service for it too.
Sky and talktalk have been trialling FTTP, they have obviously concluded the cost of rolling it out in cities like york is low enough that g.fast is a waste of time in such areas.
Have they "obviously concluded" that for "cities like york"? I haven't seen them choose to expand the trial within York, never mind expand it to a commercial service in any other location.
In fact, I'm not sure I've even seen a retail price offering from Sky yet.
Kitz you got anything to backup FTTP not been viable? because facts from other countries say otherwise.
Which countries? What kind of housing in that country?
The UK's housing consists of the lowest proportion of flats of anywhere in Europe, bar Ireland. Having lots of flats makes for more compact cities, and a greater likelihood of an FTTB solution. Hyperoptic target this market, and it amazes me that BT haven't gone for it more - other than the odd FTTRN trial.
Korea is often pointed out as great for FTTP. They have an awful lot of flats, and the market is split with around 5m FTTH, 7m FTTB and 5m HFC - and substantial infrastructure competition. Yet KT have decided that upgrading the FTTB from (fibre+VDSL) is best done through (fibre+G.now) rather than using FTTH. (G.now looks to give fairly similar results to G.fast).
So, even in Korea, the existence of a G.Fast-like technology is changing the decisions. FTTH is no longer the only game in town.
In the end, the cost for FTTP coverage of the UK has been averaged at somewhere close to £1,000 per home, and that estimate still only allows for 31% takeup. That £1,000 has to come from somewhere...
FTTP is viable providing the shareholders can accept the reduced profits in the short term.
FTTP at £1,000 per home *might* be viable if there is little risk involved in getting the money back (before any profit is involved). But the UK has an environment where that "little risk" does not exist. The competitive market is one thing that increase the risk, especially with VM increasing footprint. Competition from existing technology hurts too: bottom-feeders offering "free broadband" on existing, cheap but passable technology hurts too. Regulation is a risk too - with Ofcom constantly butting in.
But right now, even FTTC makes it less viable. With only 10% of your market likely to demand higher speeds than they can already get, FTTP is only viable if you can deploy it precisely where it is needed, without the cost of covering the other 90%. For this, the right kind of FTTP-on-demand could fit the bill. But G.Fast-on-demand is still likely to be cheaper.
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Well what we do know is that openreach are prepared to extend fibre to street distribution points without any guarantee of orders, they already consider that viable.
If fibre is pushed out that far, the extra cost of FTTP on top of that is not that significant, All openreach would need to do is push out fibre the same amount as is supposedly planned for g.fast and then only do the rest when an order comes in, so there is no rolling out FTTP without orders, in effect similar to the FTTPoD, but the main difference been the product is actually marketed and priced at a point takeup will occur.
BT have been in control of openreach for about a decade, not sure why people think they capable or even willing to improve it. The desire isnt there from BT.
Verizon said the reduced expenditure on faults alone paid back their FTTP rollout. http://www.theregister.co.uk/2015/05/20/verizon_fibre_is_so_much_cheaper_than_copper_were_going_allfttp/
Why are openreach .e.g using copper for new builds?
Also back to the topic at hand, I wonder how many of EE customers (now owned by BT) will move to BT retail broadband/tv products when they get bundling offers thrown at them. This is one reason why the deal been approved is bad, expect both talktalk and sky's customer count to plummet unless sky can buy a mobile competitor soon. Ofcom are either stupid or have been leaned on to allow it to happen.
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I'm not convinced that G.Fast will ever have a proper rollout with Openreach under BT. It just seems like an empty promise that BT have made to try and keep Openreach.
How many times have we heard promises that actually resulted in decent improvements from BT?
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They most likely have taken note of the new EU telecoms commissioner's statements a while back.
These were in effect that "competition" has resulted in lowering of prices to consumers (who seem to care about nothing else than lowest price 'now') at the expense of capital investment.
So the EU has signaled that we can see larger mergers being allowed that might have been the case and some forms of exclusivity being permitted to give the supplier guarantees on future income stream.
All designed to give a push to invest. In short consumers the days of choice being endlessly chasing the cheapest deal will go - you want a decent service for the 22nd century - start paying for it.
So I hazard a guess that OFCOM would rather these two merge than something far less palatable which the EU might then approve over the heads of any UK/OFCOM objection.
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LLU has absolutely no bearing on openreach, it only affects BT wholesale. Openreach can only be bypassed by building your own local loop.
If BT were to switch to LLU, the income Openreach would receive would fall. As LLU providers pay Openreach less than non-LLU firms.
Well what we do know is that openreach are prepared to extend fibre to street distribution points without any guarantee of orders, they already consider that viable.
That is not what BT or Openreach have actually said. They have been very careful to say any rollout is 'subject to xxxx small print' and neither have they actually said that G.Fast will go to the distribution point-in fact most now expect it to be offered from existing FTTC cabinet locations first.
If their cost of capital increases - which it would do if they were independent - it makes it a lot less viable.
If fibre is pushed out that far, the extra cost of FTTP on top of that is not that significant, All openreach would need to do is push out fibre the same amount as is supposedly planned for g.fast and then only do the rest when an order comes in, so there is no rolling out FTTP without orders, in effect similar to the FTTPoD, but the main difference been the product is actually marketed and priced at a point takeup will occur.
If fibre is pushed out to the DP, then yes, rolling out FTTP is cheaper than it would otherwise be but you are wrong in thinking the costs are not that significant. The costs of converting homes to fibre are more than connecting a DP to a fibre node - and doing it on demand also more than doing an entire area at once.
However, what you are suggesting is basically what BT have already suggested with their proposed replacement FOD2 1GB product.
Verizon said the reduced expenditure on faults alone paid back their FTTP rollout.
They have claimed that previously but it was them who also stopped their FIOS rollout. Also, more broadly speaking, they face less competition in the USA and the local loop is a lot worse there.
Why are openreach .e.g using copper for new builds?
Because many developers (and home buyers) are not demanding FTTP and/or not involving Openreach in their planning?
Also back to the topic at hand, I wonder how many of EE customers (now owned by BT) will move to BT retail broadband/tv products when they get bundling offers thrown at them.
BT still wont own EE for another month or two.
But I don't think the change will be as great as you expect given that EE already offer EE TV, line rental and broadband to their customers. The main opportunities come from BT being able to offer better mobile contracts to its own customer base.
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How many times have we heard promises that actually resulted in decent improvements from BT?
In 1999, I was getting just over 40kbps on dial-up. In 2000, I jumped to 2Mbps; in 2005, I jumped to 8Mbps; in 2011, I got options (within 6 months of each other) for either 12Mbps or 40Mbps (and chose 40).
They were all BT-based improvements - and indeed were my only option. NTL/Virgin were within 50m through all that time, but refused to include our estate, so offered nothing.
In 2012, I moved home. Since then, I've had the option of 80Mbps with BT, or any VM speeds. I've continued to choose the BT-based option, now at 80Mbps, and don't feel the need to be chasing anything higher.
Not everyone can relate the same kind of story, but there has been nothing special about my line except for the early start with the first fixed-speed ADSL. It has been fairly average at everything else.
It seems that, sometimes, the discussions about the longest and worst lines can make us forget the actual experience of the "average".
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Well what we do know is that openreach are prepared to extend fibre to street distribution points without any guarantee of orders, they already consider that viable.
That is not what BT or Openreach have actually said. They have been very careful to say any rollout is 'subject to xxxx small print' and neither have they actually said that G.Fast will go to the distribution point-in fact most now expect it to be offered from existing FTTC cabinet locations first.
I'd make this same point: BT can likely reach their 2020 target of 10m homes without taking fibre any deeper at all; just by placing a G.fast node alongside the FTTC cabinet.
And even when they want to go deeper, the Huntingdon and Gosforth trials are meant to help determine where (between PCP and DP) they will choose to site the DPU's.
BT haven't committed to where they will plant the DPU's yet - but they have said that putting 4 million of them out there (which is what would be needed to site them at every DP) is too expensive, so we can expect them closer to the PCP. Their work at "persuading" chipset firms work on extended range options for G.fast suggest they may be looking at copper distances of over 200m - perhaps 300m or 400m.
If fibre is pushed out that far, the extra cost of FTTP on top of that is not that significant, All openreach would need to do is push out fibre the same amount as is supposedly planned for g.fast and then only do the rest when an order comes in, so there is no rolling out FTTP without orders, in effect similar to the FTTPoD, but the main difference been the product is actually marketed and priced at a point takeup will occur.
If fibre is pushed out to the DP, then yes, rolling out FTTP is cheaper than it would otherwise be but you are wrong in thinking the costs are not that significant. The costs of converting homes to fibre are more than connecting a DP to a fibre node - and doing it on demand also more than doing an entire area at once.
Again, I'd make roughly the same point. However, even if BT chose to site the DPU at the DP, it would be a case of deploying 4 million DPU's, along with an average of 350m of fibre for each one, running the fibre mostly through ducted access. That's a maximum of 1.4 million km - but likely to be a lot less, as routes from PCP to DP can be shared/daisy-chained.
Rolling out FTTP would need to be to 28 million premises - a large factor more than 4 million - and an extra 50m to each: which turns out to be another 1.4 million km - but this time unlikely to be shared. All with the extra admin of needing appointments.
IIRC, the calculations done in the study on Amsterdam suggested that deployment of G.fast would be less than half that of FTTP.
And, IIRC again, the Nesta calculation of deploying G.fast vs FTTP, and factoring the eventual reuse of deeper fibre, was that deploying G.fast *now* followed by FTTP in 2023 cost the same as deploying FTTP now. Their deciding factor thus becomes: If G.fast gives you all the speeds you need until 2023, or later, you might as well deploy G.fast. If it needs replacing before 2023, then you should go for FTTP.
Meanwhile, the BSG base calculations (IIRC, again) suggested that average home would be fine with 19Mbps in 2023 (ie 19Mbps isn't enough for 50%); that 38Mbps was needed to keep the top 1% of homes happy apart from the busiest minute, and that 50Mbps was needed to keep that top 1% happy at all times.
BT themselves were estimating that, in 2025, "Many homes, most days, and some of the time" would be using 50Mbps.
If BT believe any of those figures even vaguely, G.fast looks economically worthwhile. Especially if they can pass on the costs of FTTP to subscribers who demand more than a G.fast speed, and will pay a semi-reasonable on-demand charge.
Also back to the topic at hand, I wonder how many of EE customers (now owned by BT) will move to BT retail broadband/tv products when they get bundling offers thrown at them.
But I don't think the change will be as great as you expect given that EE already offer EE TV, line rental and broadband to their customers. The main opportunities come from BT being able to offer better mobile contracts to its own customer base.
BT already do a quasi-bundle for their mobile offers, by knocking £5 off each SIM per month, if you have a BT broadband contract. But I agree that the short-term opportunity comes in improving that deal.
I also wonder whether they'll follow DT's lead, and market a home broadband service that can combine 4G and "fibre" connectivity for backhaul, giving faster speeds than available purely through the fixed network. It might even allow them to reach more of their USC target properties at 2Mbps, or the USO target of 10Mbps ... possibly in combination with the rollout of the emergency services hardware.
But I think the ultimate target is in a fully converged network. Ubiquitous coverage. Where your device (and your family's devices) connect over a BT connection, whether that is your home fixed-line connection, a work fixed-line connection, a BT WiFi connection (via someone else's home/work connection), or their 4G LTE network. Or even a combination of these simultaneously.
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BT have been in control of openreach for about a decade, not sure why people think they capable or even willing to improve it. The desire isnt there from BT.
That decade seems to have been long enough to
a) fit in a honeymoon period, adapting processes to the new relationship
b) a first attempt at cutting costs to make themselves viable, with very different engineer working patterns
c) discovering that this first effort went too far, or the wrong direction, and left a bad service record
d) having Ofcom come in with a list of targets
e) hiring a new CEO, with a revised focus, plus new set of engineers to attempt to meet Ofcom's new targets
f) start showing some improved results
... but not long enough to show the continuation of the improved results, nor any phases later to make new batches of improvements.
All this is going on at the same time as
g) the biggest overhaul of the access network since the sixties, and
h) a big increase in demand for engineer installations of FTTC
Steps (c) and (e) are the ones that show willingness and desire to improve things. Making changes, and agreeing them with both customers and regulators, is a long-winded process. Then putting them into action is another long-winded process.
Is a decade long enough to expect them to have gone through this process any more times?
It would certainly be better if this process could be more nimble - but new ownership wouldn't, by itself, achieve this. An entirely different approach to regulation might help achieve it, but I'm not sure that would bring the stability that Openreach (in either guise) would need.
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They most likely have taken note of the new EU telecoms commissioner's statements a while back.
These were in effect that "competition" has resulted in lowering of prices to consumers (who seem to care about nothing else than lowest price 'now') at the expense of capital investment.
So the EU has signaled that we can see larger mergers being allowed that might have been the case and some forms of exclusivity being permitted to give the supplier guarantees on future income stream.
All designed to give a push to invest. In short consumers the days of choice being endlessly chasing the cheapest deal will go - you want a decent service for the 22nd century - start paying for it.
So I hazard a guess that OFCOM would rather these two merge than something far less palatable which the EU might then approve over the heads of any UK/OFCOM objection.
Interesting except prices have been rising pretty fast the last few years when you take compulsory line rental into account.
I am predicting non bundled prices will go up whilst bundled prices will plummet.
Regarding investment I have already said what I think will happen :(
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BT have been in control of openreach for about a decade, not sure why people think they capable or even willing to improve it. The desire isnt there from BT.
That decade seems to have been long enough to
a) fit in a honeymoon period, adapting processes to the new relationship
b) a first attempt at cutting costs to make themselves viable, with very different engineer working patterns
c) discovering that this first effort went too far, or the wrong direction, and left a bad service record
d) having Ofcom come in with a list of targets
e) hiring a new CEO, with a revised focus, plus new set of engineers to attempt to meet Ofcom's new targets
f) start showing some improved results
... but not long enough to show the continuation of the improved results, nor any phases later to make new batches of improvements.
All this is going on at the same time as
g) the biggest overhaul of the access network since the sixties, and
h) a big increase in demand for engineer installations of FTTC
Steps (c) and (e) are the ones that show willingness and desire to improve things. Making changes, and agreeing them with both customers and regulators, is a long-winded process. Then putting them into action is another long-winded process.
Is a decade long enough to expect them to have gone through this process any more times?
It would certainly be better if this process could be more nimble - but new ownership wouldn't, by itself, achieve this. An entirely different approach to regulation might help achieve it, but I'm not sure that would bring the stability that Openreach (in either guise) would need.
e) was forced on them.
Interesting comments regarding DP's in the last few posts.
When I posted on TBB and plusnet suggesting that BT will do g.fast cheap and only deploy from cabinets, you and some others were telling me because the trials are done with deeper fibre thats how the rollout will be, so which way is it?
Are BT going to do g.fast on the cheap with next to no investment and only deploy from cabinets (or next to cabinets), in which case it would prove my point about been allergic to spending money, or are they going to deploy from nearer to the property in which case my point about FTTP not been a significant cost is valid. The £1000 per property by the way was from pre FTTC, so that estimate is already out of date and was based on no FTTC been done to cabinets already.
Also my own experience and reading revk's blog only shows openreach getting worse not better. e.g. They have steadily over the years implemented policies that discourage fault reporting and also make it harder to classify a service faulty, aaisp 10 years ago didnt have to tell their customers to hide their router's to stop an engineer blaming it for a fault.
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Openreach clearly needs to get more money in, and probably putting up the prices for repairs and such would be a good way doing it. The government needs to be putting in more investment to cure extremely slow rural fibre, and the profits from some if the this should be going straight to OR?
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I think this discussion has run its course, and most of it has nothing to do with the original subject...
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Apologise most humbly for my previous offtopic posts.
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Interesting except prices have been rising pretty fast the last few years when you take compulsory line rental into account.
Im not sure how many times I have to say this... but that is not the doing of Openreach. The wholesale costs charged to the ISPs has fallen. Did you see the document I posted the other day? Line rental is cheaper. Its the ISPs who have been inflating the prices... it started off with the offsetting of broadband costs purely so that certain ISPs could advertise cheap broadband for the first 'x' months. Blame the likes of TT and Sky who started that ball rolling. The others followed because the ads showing free broadband worked and too many people were sucked into cheap broadband not looking at the total cost. :wall:
I am predicting non bundled prices will go up whilst bundled prices will plummet.
Again thats up to the SPs who resell it us.. what they pay Openreach/wholesale is set. Of course they will try sell triple/quad play services. They are all at it. Nowt to do with Openreach. Its the SPs who want a slice of each pie, so of course they will sell bundles cheaper. TalkTalk and Sky started it. [/broken record] :(
Interesting comments regarding DP's in the last few posts.
When I posted on TBB and plusnet suggesting that BT will do g.fast cheap and only deploy from cabinets, you and some others were telling me because the trials are done with deeper fibre thats how the rollout will be, so which way is it?
I dont do TBB so no idea what was said. I dont think even BT themselves know yet as surely it will entirely depend upon a review of the local area?
Ive seen documentation which shows both, but the vast majority of the diagrams are as an extension from the cab. To me it would make most sense to do it this way as there will be a node near to it.. and its how FFTPod is currently provisioned. Does it matter how it is provisioned as long as the bandwidth is there? All the nodes usually hook up to an aggregation node at some point anyhow.
Are BT going to do g.fast on the cheap with next to no investment and only deploy from cabinets (or next to cabinets), in which case it would prove my point about been allergic to spending money, or are they going to deploy from nearer to the property in which case my point about FTTP not been a significant cost is valid.
Sorry that paragraph does not make sense to me. Fttdp is just that... to the DP... not the cab! The locations of the DPs are already there.. some are on poles, some are UG.
There's at least 4.2 million DPs in the UK compared to circa 90k PCPs.
The most expensive part of provisioning FTTH is the final stretch ie from the DP to the home as this is where ROI is least effective. We are not just saying this.. it is a world-wide fact. :(
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I think this discussion has run its course, and most of it has nothing to do with the original subject...
Ooops sorry sir, I had already started my post before yours.
You are correct in that BT's deployment of FTTH/FTTDP nor the splitting off of Openreach is nothing to do with the acquisition of EE :-[
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There's at least 4.2 million DPs in the UK compared to circa 90k PCPs.
Roughly 4.7 million DP's and 98,000 PCPs according to the latest BT Annual report (P71) (https://btplc.com/Sharesandperformance/Annualreportandreview/pdf/2015_BT_Annual_Report.pdf)
But to bring this back somewhat to topic and BT buying EE:
But I think the ultimate target is in a fully converged network. Ubiquitous coverage. Where your device (and your family's devices) connect over a BT connection, whether that is your home fixed-line connection, a work fixed-line connection, a BT WiFi connection (via someone else's home/work connection), or their 4G LTE network. Or even a combination of these simultaneously
I agree - BT's interest has always been in trying to have as much traffic as possible carried over its network.
In fact, I fully expect the Home Hub 6 or 7 to include a femtocell - and I suspect if the technology had been more advanced/ready for market, BT might even have opted to launch BT Mobile using femtocell's and its broadband network - and opting against buying a mobile firm at all.
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The others followed because the ads showing free broadband worked and too many people were sucked into cheap broadband not looking at the total cost. :wall:
I posted this on the Plusnet Community forums the other day:
If an ISP advertised FREE Unlimited 80/20 fibre with £100 cashback (plus £75 per month line rental) some idiots would buy it!
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I can believe it Jelv.. and then they would still point the finger at Openreach! The practice of cross subsidisation has got out of hand to the point of ridiculous. Too many of the SPs are now insisting that you must have line rental with them or charge a premium. IMHO OFCOM should be investigating this and it would be far more beneficial to the EU.
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kitz please dont speak to me like I am simple, check the post I Replied to
"has resulted in lowering of prices to consumers"
since when are wholesale customers consumers?
My comment regarding bundled prices is in reference to EE. Not to BTw/openreach or whatever.
So to repeat I predict EE prices will go up for those who dont take other BT services, and plummet for those who take other BT services.
Also regarding FTTP cost who is the "we" you refer to? You and BT?
The most expensive part of FTTP is already done, it depends if you looking at a per premises cost or an overall cost. e.g. in my case my copper line was over 4km to the exchange, now its just circa 400m to the cabinet, post g.fast it could be down to just 100m or so of copper, are you trying to imply its more expensive for BT to replace 100m of copper from a pole than it is 4km via ducts? sorry that doesnt compute here :)
Players in the industry (who have rolled out FTTP) dont state the last part is the most expensive, its only moderately expensive if its a first order. e.g. if I order FTTP, then my neighbour orders it, the work needed for my neighbour would be minimal.
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So to repeat I predict EE prices will go up for those who dont take other BT services, and plummet for those who take other BT services.
BT/EE will still need to compete with the other mobile operators for those who are not interested in bundle.
The most expensive part of FTTP is already done, it depends if you looking at a per premises cost or an overall cost. e.g. in my case my copper line was over 4km to the exchange, now its just circa 400m to the cabinet, post g.fast it could be down to just 100m or so of copper, are you trying to imply its more expensive for BT to replace 100m of copper from a pole than it is 4km via ducts? sorry that doesnt compute here :)
No, the most expensive part of FTTP has not been done - that is the final connection to the customer as several here keep trying to tell you.
And while you can't take your example as representative of the whole country, its quite possible that installing the last 400/100 meters of fibre is more expensive than the other 3.6/3.9km Km for BT.
For one thing, they would actually need to deal with end customers and make appointments etc. adding to the cost/time taken, for another: the cost of the earlier fibre would be divided among many different customers - the last 100 meters from a DP would effectively just be for you.
Players in the industry (who have rolled out FTTP) dont state the last part is the most expensive, its only moderately expensive if its a first order. e.g. if I order FTTP, then my neighbour orders it, the work needed for my neighbour would be minimal.
Which players are these? If they are building a proper network, it will be true unless its a greenfield development etc. or there are some other special circumstances in play (i.e. they stop at the property boundary)
Just think, if you order G.Fast, then your neighbour orders it, the work needed for the neighbour would be close to zero.
FTTP on the other hand would need an appointment, a fibre dropwire (possibly drilling through walls and/or a joist) and whatever NTE/ONT they are fitting.
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International players.
The appointments and so forth are costs but they not necessarily that different from costs VM have when they cable up a new customer. Or when BT have to install a new line to a property where there is no existing line. Certainly wont be the costs quoted earlier in the thread (providing fibre is extended to DP points on poles etc.). BT are good at inflating costs when they are either trying to get government money or justifying a way of not investing into something, that's why I am not using BT as a source of my information.
On a new development fibre is cheaper than copper full stop.
On existing developments in the areas where g.fast is likely to be rolled out (short distances between cabinets and end users), providing BT used common sense the cost wouldnt be prohibitive as I said. You also seem to be completely ignoring the post roll out savings I pointed out as well.
To requote ignition probably the 5th time now I done it "openreach act like they running on payday loans" in that they always do the cheapest short term cost option.
g.fast will be like how FTTC was the first few years, engineer installs.
A fibre dropwire is hardly big work (might be for openreach I suppose), but thats a pretty minor job.
Also to avoid confusion when I refer to DP I mean a g.fast node, so the end point of the copper.
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Earlier in this thread Eric posted --
I think this discussion has run its course, and most of it has nothing to do with the original subject...
I shall now re-iterate the above.
This thread was started by Black Sheep to provide us with a copy of the BT Group's CEO's statement following the CMA's approval for the BT Group to acquire EE.
If anyone wishes to post on other subjects, please do so either in thread specifically started for the topic to be discussed or as a continuation of a relevant, pre-existing thread.
After a period of thought, my final five words are --
This thread is now locked.