back to article Having made £1bn in gross savings well ahead of March 2023 deadline, more cuts could be on BT's agenda

BT is said to be mulling whether to widen the multibillion-pound cost savings initiative that began in 2018 after meeting financial goals well ahead of the deadline. The former state monopoly, which reports its latest quarterly Profit & Loss accounts on 4 November, released a statement today updating on its progress. "BT …

  1. Gordon 10 Silver badge

    Management Idiocy in full effect

    Offing staff nearly always shows up front savings even including redudancy packages well before the inevitable cost consequences come home to roost. Expect costs to go back up and service to decline further.

    Real Estate sales are pretty zero sum as well. Generally property is an appreciating asset so real estate sold now would have been worth more next year - far better to lease out to a developer and rake in ground rents.

    Classic MBA short sightedness.

    1. Anonymous Coward Silver badge
      Big Brother

      Re: Management Idiocy in full effect

      But if you have debts that are accumulating interest quicker than property prices are increasing, you're better off selling and paying off the debt.

      Or investing the money in something that grows quicker than real estate.

      With the fibre network (FTTP and cabinets) the exchange buildings are largely redundant now. Might as well sell them off and save the maintenance costs etc.

      But, I'm sure that BT have excellent beancounters who have studied it all and worked out the best (most profitable) way forward.

      1. Doctor Syntax Silver badge

        Re: Management Idiocy in full effect

        Or plugging the black hole in the pension scheme.

      2. Yet Another Anonymous coward Silver badge

        Re: Management Idiocy in full effect

        >debts that are accumulating interest quicker than property prices are increasing

        Who are you borrowing from? Is their middle name "Razors" ?

      3. simpfeld

        Re: Management Idiocy in full effect

        Yup I'm surprised there isn't more of this on the Exchange building front. I don't believe BT has said anything about this, but currently I think FTTP fibres still terminate at the usual exchange?

        Once an area retires copper phone lines, you are correct you could (in theory) reduce these to almost nothing. A few key sites countrywide in the extreme.

        Anyone know if this has been talked about anywhere officially?

        1. Anonymous Coward
          Anonymous Coward

          Re: Management Idiocy in full effect

          > Once an area retires copper phone lines, you are correct you could (in theory) reduce these to almost nothing. A few key sites countrywide in the extreme.

          The 2025 date is for the retirement of copper analogue voice lines, however copper will continue to be used for ADSL/VDSL/G.fast for some timeframe beyond then.

          As ADSL lines go from buildings to the local telephone exchange then exchanges cannot be decommissioned until all ADSL services are ceased and I have seen no announcement of Openreach plans to cease ADSL.

          Therefore it is unclear when any exchanges could be decommissioned (i.e. not until the *last* person using ADSL on an exchange switches to FTTC/FTTP or cancels their service). Indeed after 2025 it appears that Single Order Transition Access Product (SOTAP) will be the Openreach term for ordering new copper pairs for ADSL use so it is not even a case of Openreach waiting for existing ADSL lines to be ceased, they will "happily" access orders for new ADSL lines after 2025.

          Some exchanges are likely to find other uses. In my city for example portions of two exchange buildings became BT Data Centres acting as hosting (primary & fallback site) for local government.

      4. AndrueC Silver badge
        Meh

        Re: Management Idiocy in full effect

        With the fibre network (FTTP and cabinets) the exchange buildings are largely redundant now. Might as well sell them off and save the maintenance costs etc.

        BT sold their exchanges off twenty years ago.

      5. NeilPost Silver badge

        Re: Management Idiocy in full effect

        Exchange buildings …need reduced, not redundant.

        Where do you think the legacy copper goes?? Where do you think the new FTTP goes ??

        Where do you think BT’s backhaul connections terminate??

        And if you think it’s all going to be replaced by invisible fibre anytime soon you are heavily deluded.

      6. juice

        Re: Management Idiocy in full effect

        > But, I'm sure that BT have excellent beancounters who have studied it all and worked out the best (most profitable) way forward.

        I'm sure they've figured out the best way to meet their goals for this financial year, so as to get a bonus. Whether or not that translates into the best way to do things for the company as a whole...

    2. low_resolution_foxxes Silver badge

      Re: Management Idiocy in full effect

      It's a curious trade off and not quite the slashing you might think.

      Copper transmission requires high power and closer proximity compared to FTTP. From recollection, BT have ~ 6000 copper exchanges, but only require 800-1200 to fully support nationwide FTTP solutions. Beancounter or not, if copper exchanges are being discontinued for the rollout of FTTP and you have the ability to sell/stop supporting 80% of your premises, you lose a significant amount of overhead, running costs and staff. Plus you also get to sell off any land/buildings where the exchange are stored (I wouldn't be surprised to see the figure in the billions).

      But in practice, this is a slow and painful transition that will take a decade to achieve. The reason they are probably ahead of target, is because they have ramped up the rollout of FTTP and announced huge numbers of areas where copper will be discontinued (I think they are only allowed to shut the exchange when 75-80% of users can get FTTP - even then they are obliged to give customers 1-2 years notice to upgrade their phone lines).

    3. hoola Silver badge

      Re: Management Idiocy in full effect

      Yes and no, the real problem, they have is this obsession with "shareholder value".

      There is little they can do about it if a major shareholder decides that they need "more value", ie. more money for the investment. The options here are down to them trying to protect themselves from another buyout.

      BT, like most of the UK utilities is a foreign investors wet dream.

      That is not the fault of BT but successive governments who persist in allowing any national asset to be sold to anyone who waves some money at the board and shareholders. Invariably now, they are either foreign utility companies of asset stripping "investment funds".

  2. Doctor Syntax Silver badge

    "These include Altice making a formal takeover of BT"

    Does HMG still hold the golden share?

    1. NeilPost Silver badge

      Yes… but (like the Royal Mail) a Crown Guarantee too on the former state final salary pension scheme.

      BT have a multitude of pension funds… only the final salary one gets money to plug it. Anyone on a (last 20+ years) money purchase Standard Life/BT Pension Scheme can fuck right off for any company money to bolster it.

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