The Lemon Fool

Good afternoon,

You might've noticed the 2.5% drop in SP of BT.A today. It seems it is regarding this;


"BT's Openreach division, which runs the UK's broadband infrastructure, should become a distinct company within the BT group, according to regulator Ofcom.

Campaigners said the changes could not come soon enough for the millions of people who have suffered "woeful levels of service from Openreach".

The media watchdog has resisted calls to split Openreach off entirely.

Instead, Ofcom said its plans would ensure the most independence from BT without the costs of a full break up.

More people will receive faster, more reliable broadband as a result of the changes, Ofcom boss Sharon White told the BBC.




The plans "can be introduced within months", rather than the years that a sell-off would involve, Ms White said.
◾How BT dodged a bullet on Openreach
◾Broadband and you: 'Get a grip, BT'
◾What future for BT and broadband?
◾Business Live: Ofcom promises faster broadband"

See http://www.bbc.co.uk/news/business-36891446

Also today, although registration required to view full item;

Time is running out for BT to reach agreement



Regulators have said that they expect to announce a final decision on the future of BT and Openreach within weeks.

Ofcom has approached the European Commission to discuss how it could force BT to legally separate from its broadband infrastructure unit. British officials are drafting documents which would enforce the division, should negotiations with the telecoms giant break down.

Calling on BT to move closer to Ofcom's position, Sharon White, the chief executive of the regulator, said last week that Openreach's future as a legally separate company remained an “important gap” between the two sides. The regulator outlined proposals this summer for the chief executive of Openreach to report to an independent board, rather than that of BT Group.

http://www.thetimes.co.uk/edition/busin ... -jq72fp63g

For me, as a long term investor, it presents a buying opportunity. Anyone dipping their toes?

Ian.

I can't add anything else to mine until the new ISA year starts but BT are on my watchlist.

This isn't the first time Openreach has been threatened and it won't be the last. And the pension deficit keeps rearing it's head too, but as I've said before, whilst it is only sensible to take a view about news, there does come a point when you have to bite the bullet and employ the well known strategic ignorance card.

For what it's worth, I held BT for several years in my first HYP and sold because of pension deficit worries. Yet here we are a decade or so later and BT continues to churn out the income.

That taught me a lesson!

Staffordian

idpickering wrote:Good afternoon,

You might've noticed the 2.5% drop in SP of BT.A today. It seems it is regarding this;

For me, as a long term investor, it presents a buying opportunity. Anyone dipping their toes?

Ian.

=================================

It could be a good time to buy .

the numbers look ok , except debt and the pension deficit .

there has been big director selling this year and no substantial buying .

I am not tempted .

.

If Open Reach goes, share holders should get shares in the new business.

The greater concern is the £10bn pension deficit that keeps sucking up cash.

BT is a bit too pricey for me but I would be interested if it became significantly cheaper.

If they split off Openreach, how will they divi up the pension non-pot.
Not for me.

V8

This announced this morning;

MIKE McTIGHE TO BE FIRST OPENREACH CHAIRMAN

"Brings extensive regulatory experience from his eight years on Ofcom's Board

Will help appoint further independent members to the new Openreach Board


Mike McTighe has been appointed the first Chairman of Openreach, BT's local fixed network business. McTighe, who takes up his role from January, is an experienced telecoms executive and regulator who spent eight years on the Board of Ofcom. He will oversee the new Openreach Board - which will operate from early 2017 - and be instrumental in selecting further independent members to join that Board."

http://www.investegate.co.uk/bt-group-p ... 00133600Q/

I expect BT will come to an agreement with the regulator at some point. They do not strike me as being stupid. The market does not like uncertainty but my feeling is that apart from the pensions deficit all will be OK.

I hold only a small position relative to my other holdings and am not too bothered.

Dod

idpickering wrote:MIKE McTIGHE TO BE FIRST OPENREACH CHAIRMAN
"Brings extensive regulatory experience from his eight years on Ofcom's Board

Gamekeeper turned poacher?

BT must legally separate Openreach, Ofcom rules

"Ofcom has ruled that BT must legally separate from its Openreach infrastructure arm due to its failure to satisfy the regulator's competition concerns.

BT made a move late on Monday to try and prevent the enforced spin-off with the appointment of a former director of the telecoms regulator, Mike McTighe, as chairman of Opeanreach but seems not to have proved sufficient, although Ofcom has offered the company the chance to address its outstanding concerns.

The regulator said that a more independent Opeanreach that works in the interests of all providers, such as Sky, TalkTalk and Vodafone, would provide a better service."

http://www.digitallook.com/news/news-an ... 26076.html

idpickering wrote:BT must legally separate Openreach, Ofcom rules

"Ofcom has ruled that BT must legally separate from its Openreach infrastructure arm due to its failure to satisfy the regulator's competition concerns.

BT made a move late on Monday to try and prevent the enforced spin-off with the appointment of a former director of the telecoms regulator, Mike McTighe, as chairman of Opeanreach but seems not to have proved sufficient, although Ofcom has offered the company the chance to address its outstanding concerns.

The regulator said that a more independent Opeanreach that works in the interests of all providers, such as Sky, TalkTalk and Vodafone, would provide a better service."

http://www.digitallook.com/news/news-an ... 26076.html

I don't think it is fair BT owns Open Reach and a change is long overdue.

This is all old news, surely? AFAIK, nothing new has been announced apart from the appointment of the first Openreach chairman - this structure was already agreed with Ofcom.

Whether it's "fair" or not depends on your point of view. Murdoch and others want to get their hands on something which is a UK Tax payer and later, shareholder, legacy and which they covet. They will spin the press (which Murdoch owns) in their favour, naturally, but they've had opportunities in the past to put money into inproving infrastructure and didn't want to.

BT, on the other hand, has the burden and benefit of maintaining the infrastructure, having built it up over many years. If they are in a dominant position, it's because of the effort they put in and the dominant business position they had: bully for them. That's what capitalism is all about - getting an advantage by taking on risk. We investors are always looking for companies with "moats" -- what's that if it isn't wanting a dominant position? so when we find one, let's be glad we own it and not whinge about it BT also has the additional burden of a "fair" legacy pension scheme to maintain which Sky and other competitors do not. What would be "unfair" from my point of view as a shareholder, would be if the commercial snakes got control of part of my company on the cheap and used that asset to undmine that company.

So, as I said, fairness is not always absolute: each party has its prejudice, and frankly, my prejudice is that I wouldn't believe a word on this issue which comes from the Murdoch press!

I thought I posted this earlier, but it disappeared into the ether:

Whether it's "fair" or not depends on your point of view. Murdoch and others want to get their hands on something which is a UK Tax payer and later, shareholder, legacy and which they covet. They will spin the press (which Murdoch owns) in their favour, naturally, but they've had opportunities in the past to put money into inproving infrastructure and didn't want to.

BT, on the other hand, has the burden and benefit of maintaining the infrastructure, having built it up over many years. If they are in a dominant position, it's because of the effort they put in and the dominant business position they had: bully for them. That's what capitalism is all about - getting an advantage by taking on risk. We investors are always looking for companies with "moats" -- what's that if it isn't wanting a dominant position? so when we find one, let's be glad we own it and not whinge about it BT also has the additional burden of a "fair" legacy pension scheme to maintain which Sky and other competitors do not. What would be "unfair" from my point of view as a shareholder, would be if the commercial snakes got control of part of my company on the cheap and used that asset to undmine that company.

and BT was rolling out fibre to the home in 1991 (according to an ex BT employee from the time speaking on 'wake up to money' this morning), but was made to stop by the government of the time as it would be anti-competitive (they wanted new entrants to do it). So in the last 25 years we can see what a good job those competitors have done on wiring up the country. Maybe if BT had been left to get on with it in 91 we'd have better infrastructure now.

I must admit to being tempted to buy yet more of this stock for my December dollop of cash, in order to buy some more of that 4.3% dividend yield, prior to the ex divi date of 29 Dec 16. Having been priced around a fiver (I haven't confirmed the exact figure) in January this year, they've got to be a steal right now? If I did buy more rather than the BLND purchase I mentioned in this thread, http://www.lemonfool.co.uk/viewtopic.php?f=15&t=773 that'd be three months in a row of buying BT.A! They currently form 3.84% of the 24 share HYP whole. Anyone else of a same mind?

Ian.

I don't see a problem with buying more BT - it all depends on the balance of other things in your HYP.
My position wouldn't justify it as there are companies higher up the table, but on its own terms, so to speak, BT is yielding quite well at present - but then, so is BLND, for instance.


Arb.

Arborbridge wrote:I don't see a problem with buying more BT - it all depends on the balance of other things in your HYP.
My position wouldn't justify it as there are companies higher up the table, but on its own terms, so to speak, BT is yielding quite well at present - but then, so is BLND, for instance.


Arb.

Hi Arb,

Thanks for your input. For clarity, BLND currently stand at 2.54% of the HYP whole, hence my original intention of nudging them up next. There's no rush and I could get back to BLND later. I've got three weeks to 'Pickering' about it . Further to this, another top up of BT.A will bring it up to the average value weighting ie 100/24 = about 4.16% of the whole.

Regards,

Ian.

I must admit to being tempted to buy yet more of this stock for my December dollop of cash, in order to buy some more of that 4.3% dividend yield, prior to the ex divi date of 29 Dec 16

Buying cum div means that you're buying the divi included in the share price, only to get that amount returned to you when the dividend is paid. Better, IMHO, to buy ex div when in theory the price should be lower.

Regards,

Leither.

Leither wrote:

I must admit to being tempted to buy yet more of this stock for my December dollop of cash, in order to buy some more of that 4.3% dividend yield, prior to the ex divi date of 29 Dec 16

Buying cum div means that you're buying the divi included in the share price, only to get that amount returned to you when the dividend is paid. Better, IMHO, to buy ex div when in theory the price should be lower.

Regards,

Leither.

Thanks for your input Leither. An interesting point. I like to get the divi on board asap to aim compounding. What do other hypers do?

Ian

I disregard the dividend payment date. If I decide to buy, I buy. As Leither says, the cum dividend should be included in the price anyway, although it does not always work out that way.

Dod1010 wrote:I disregard the dividend payment date. If I decide to buy, I buy. As Leither says, the cum dividend should be included in the price anyway, although it does not always work out that way.

==============================

Absolutely .

All other things being equal , and there is no way of knowing which way they wont be equal , buying cd /xd makes no difference to the outcome.

.

jackdaww wrote:

Dod1010 wrote:I disregard the dividend payment date. If I decide to buy, I buy. As Leither says, the cum dividend should be included in the price anyway, although it does not always work out that way.

==============================

Absolutely .

All other things being equal , and there is no way of knowing which way they wont be equal , buying cd /xd makes no difference to the outcome.

.

I agree. Its not something I'm going to fret about. Its not like we're talking £millions here.

Ian