BT shelves efforts to find investor to share FTTP build, says Openreach can run project alone

BT has decided against bringing in an external investor to help with the rollout of fibre networks across Britain, this morning citing lower build costs per premise as the rationale for going it alone via its Openreach division. "We have conducted an extensive review and held discussions with prospective investors," said CEO …

[Pascal Monett]

Ain't life good ?

BT gets a vast reduction in taxes, suddenly finds that fibre rollout is less expensive than it thought, and will now be posting insultingly positive results and keeping the moolah to itself.

Way to go, BT shareholders ! Congratulations on having skimped on fibre rollouts until costs "miraculously" came down amid the rest of the world's industries crying panic over extended delivery lead times and vast increases in costs from sourcing materials and products.

You really are a shining example of capitalism at its finest.

[Roland6]

Re: Ain't life good ?

>BT gets a vast reduction in taxes

But only if it spends the moolah...

So yes we can expect it to report good before tax results, but because of the investment expect it to not declare substantive profits and dividends for a few years.

Remember because BT is a UK HQ'd company, and does most of its business in the UK, it can't indulge in the tax dodging tricks Amazon, Google, Starbucks etc. get up to, so those surplus revenues really have to go on capital expenditure...

[Anonymous Coward]

Re: Ain't life good ?

"because BT is a UK HQ'd company, and does most of its business in the UK, it can't indulge in the tax dodging tricks Amazon, Google, Starbucks etc. get up to, "

Nope. It can indulge in those sorts of tricks too. BT might have access to fewer scams than the companies you mentioned. But there are plenty of creative accounting tricks to doge tax that are open to big UK companies: transfer pricing, funneling revenue through offshore accounts, selling assets to subsidiaries in tax havens, pension fund trickery, creating paper losses overseas to offset actual profits, etc.

[Dante Alighieri]

Re: Ain't life good ?

but still recover the "costs" from consumers

[Persona]

Re: Ain't life good ?

With 25 million premises to cover at ~ £300 a time it's a £7.5 billion investment so yes they should get some tax breaks.

[devin3782]

So they're doing via tax breaks rather than investing say the profit they make. WTF is wrong with company directory sponging wankers!

Spend the profit you make to make better products that's how its supposed to work. But no we the tax payers have to subsidise a large profit making large corporation.

[Wellyboot]

Yes it's a subsidy but we're getting the fibre installed much quicker as a result and TBF who wouldn't take advantage if offered a £1.30 tax write-off for every £1.00 spent.

This is also a good way to get a lot of green infrastructure investments moving.

[Anonymous Coward]

No they'll do what the american isp's did with their subsidies and that's pocket the money and not roll out any better service.

[Dante Alighieri]

value

unfortunately the world currently works on short-termism.

value is the dividend, not the future growth of the company.

so the corporate raiders and short term investors swamp any ethical and intelligent investment for the medium or longer term.

TRUE value lies in longer term holdings where the longer gains are substantively more.

But the pension funds and banks are equally short sighted at present (but not all).

More one share AGM activists are needed.

I need to practice what I preach. :(

cf handle - 4th circle (or the Addams Family)

[ComputerSays_noAbsolutelyNo]

Why?

"... allows BT to write off up to 130 per cent of its infrastructure deployment costs:"

Wouldn't it be cheaper if the government itself deployed the infrastructure?

I guess it depends on the exact nature of the "write off", I am neither Brit nor much into finance/financial politics.

On the one hand, the government waives a massive amount of tax from BT, in order to make them deploy fibre.

Could the government, on the other hand, not simply deploy the fibre itself?

In the end, the government pays for itm this way or the other.

[Roland6]

Re: Why?

The government is using the "Super Deduction" tax incentive to encourage businesses to spend on enhancing their business at a time when they might be strongly tempted to tighten their belts. The effect the government is hoping for is this expenditure will directly help the current UK economy and help UK businesses be in a better shape for the future, both of which should result in increased tax revenues...

[Phil O'Sophical]

Re: Why?

Could the government, on the other hand, not simply deploy the fibre itself?

On past records of governments doing things like this, it would cost twice as much and would probably get everyone on 10Mbit/s shared connections by 2050.

[Eclectic Man]

Re: Why?

Well, maybe, but they'd only meet that target if Dido Harding does not go anywhere near it.

/Cynicism alert

[cyberdemon]

Re: Why?

no cynicism required, sadly

[AndrueC]

Re: Why?

..and the only router you can use is the one they give you.

I am just old enough - at 54 - to remember what the UK telephone network was like under government ownership. There were some clever people at the PO producing some clever kit but the government was unable/unwilling to provide the funds to exploit it.

As a result the network was an unreliable and expensive mess.

[Doctor Tarr]

Re: Why?

A thumbs up from me. There were some exceptionally talented and inventive people there. I’m lucky to have one working for me.

BT wasted the talent and opportunity.

[Anonymous Coward]

Re: Why?

"Could the government, on the other hand, not simply deploy the fibre itself?"

Really? The government that builds aircraft carriers with no aircraft and gives ferry contracts to companies with no ships? The government that has never, ever delivered an IT project on time or on budget? The government that has clueless incompetents like Dominic Raab, Shagger Boris, Priti Patel, & Liz Truss in the top jobs?

[Phones Sheridan]

I'll point out that the 130% tax break does not mean you spend £100K and you knock £130K off your tax bill. Instead, on a spend of £100,000, the corporation tax deduction will be £130,000, giving corporation tax relief at 19 per cent on £130,000, which is £24,700.

Put another way, for every £1 you invest, you can knock 25p off your tax bill. This is currently open to all companies, not just BT, and there are terms and conditions attached. I for one have taken the opportunity to buy in new hardware to handle current growth.

[Anonymous Coward]

En el campo..

Here in rural Spain I've had actual fibre optics in the casa for about 3 years now, and I wasn't the first.

[mark4155]

Re: En el campo..

Yes you are a lucky Señor and as you walk around the the orange tree lined roads, with your obligatory sombrero aloft the old noggin, check out the street cabinets. Resplendent with a lovely "Funded By The EU sticker".

This my amigo, is why you have such a fantastic FTTP, despite many casas being served from poles that look like twisted decaying dead trees, overloaded by heavy aerial copper distribution cables and are unclimbable.

In the UK as an ex OR pole monkey the whole lot would have a "D" label on them (Dangerous Defective Decaying) - simply do not climb.

I say this purely out envy for you, and Spain I'm not a green eyed monster. (Fingers crossed behind my back). :-) Hasta Mañana.

[Anonymous Coward]

Re: En el campo..

We have had FTTP @ 500Mbps at the Murcia villa for 3 years now (EUR 25.00 per month) and now FTTP @ 950Mbps at home in Hampshire (GBP 25.00 per month).

Things are good - and watching UK TV from Spain, via IP, is working very well indeed.

[X5-332960073452]

Re: En el campo..

Could you let us know who you use for the connection, £25 for 950mbps seems cheap.

[darklord]

Well im Convinced NOT!!!!!!!!!

My daughter moved house in June, And is still waiting for open reach to install their broadband, and it keeps slipping, Latest date 25/11/2021, am I convinced this is going to happen?

Nope

And this is a business connection. So at least she is getting a fiver a day as credit against a service she is not getting ??????

[Roland6]

Re: Well im Convinced NOT!!!!!!!!!

>And this is a business connection.

She should have gone with one of Zen, A&A etc. ie not with BT/Openreach directly; Openreach has to deliver services to these under Ofcom rules...

[Anonymous Coward]

Re: She should have gone with one of Zen, A&A etc.

Zen seem to be picking up a bit of flak in recent months, at least in the consumer market. Perhaps it shouldn't be a surprise when most of the industry is in a race to the bottom.

"Openreach has to deliver services to these under Ofcom rules..."

Which means what, in real terms? If BT plc trading as Openreach choose not to supply the customers that aren't subsidiaries of BT plc, who's going to enforce the "equal access" rules?

[Roland6]

Re: She should have gone with one of Zen, A&A etc.

>Which means what, in real terms?

Zen/Ofcom can give BT/Openreach a £serious kicking - but you do have to order a business line...

The longest I've waited with Zen for a missed Openreach delivery date has been 5 days.

Mind you, I've been impressed by EE's post-BT takeover response, as it also seems to be able to get Openreach to deliver on consumer/residential lines.