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Mikhail Liebenstein

BT leaves property billionaires in the dodo.

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My hear bleeds: https://www.standard.co.uk/business/bt-restructure-the-property-billionaires-hit-by-telecom-giants-move-to-reduce-estate-a3835476.html

What I find particularly quaint is the belief that they’ll be ok as they mostly own exchanges. Obviously they don’t understand modern networks and what those green cabinets can do these days and . Suspect they think there are full of ladies, with 1950s plum voices, sticking connectors into a switchboard.

 

He added: "The majority of Telereal Trillium’s BT estate is comprised of Telephone Exchanges and therefore any closures as part of BT’s rationalisation of its UK office estate will have minimal impact on the company. The William Pears Group (WPG) interest in Telereal Trillium is by means of a fixed coupon preference share, therefore WPG is highly unlikely to be affected regardless of any impact on Telereal Trillium.”

 

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Sale and lease back deals. Effectively a 'lifetime mortgage' for companies. Take an asset you own outright - your exchange network- sell it for a lump sum to someone who promises to lease it back to you for a manageable monthly payment for say, 30 years. 

You got a big lump sum 17 years ago which is now long gone but you end up paying massively more than you gained from the sale and, with the benefit of hindsight, they lost massive property inflation gains as well. Also in this case BT are bound to pay the rent til another tenant is found which frankly could be decades for some exchanges 

I've a closed down exchange a short walk from my house. It's at the end of a residential street next to some scrap ground. Can't imagine it's worth much and would need to be demolished. You might think some of the bigger city centre exchanges could be renovated into flats...but if you've got BT by the balls to pay their rent on those properties for another 13 years even if they don't occupy them why would you bother.

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Desperation from BT after the shares have continued their unchecked straight line channel down from five pounds at the end of 2015 to a new low of £2.17 last night.

The bloated workforce has apparently 13,000 unnecessary white collar jobs to shed with crippling financial severance consequences, at the same time they are short of engineering technicians. Sums  up the UK really, graduate desk jobs and no technicians. Plus the small matter of the 11 billion final salary pension deficit, more than half of Market cap.

 

7% dividend, price to earning 11.5, feeling lucky punk?

https://shares.telegraph.co.uk/fundamentals/?epic=BT.A

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BT are awful and have bigger problems than expensive London offices. I complained about some charges that were blatantly unfair/illegal and their customer support team were simply not interested in my complaint. 

The result? I took it to the ombudsman who promptly ordered them to cancel all outstanding charges (£75) and awarded me £30 compensation for my trouble. Now I'll also never use them again. All of this cost BT a £600 case fee, which they'd have to have paid even if the Ombudsman had agreed with them.

Amazing that they're still in business frankly as I know my situation was not at all unique.

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1 hour ago, crashmonitor said:

Desperation from BT after the shares have continued their unchecked straight line channel down from five pounds at the end of 2015 to a new low of £2.17 last night.

The bloated workforce has apparently 13,000 unnecessary white collar jobs to shed with crippling financial severance consequences, at the same time they are short of engineering technicians. Sums  up the UK really, graduate desk jobs and no technicians. Plus the small matter of the 11 billion final salary pension deficit, more than half of Market cap.

 

7% dividend, price to earning 11.5, feeling lucky punk?

https://shares.telegraph.co.uk/fundamentals/?epic=BT.A

How does this work? It sounds very Enronesque or Barclays Protium style?
 

Quote

 

The pension scheme of BT is considered to be one of the largest private schemes in the United Kingdom.

The triennial review of the pension scheme of BT is the largest private scheme in the United Kingdom. It discovered that the shortfall in funding that was increased from £7bn to £11.3bn as interest rates remained to be historically low. The investors are concerned about a sharp rise in the top-up payments. The trustees agreed to keep the draw on the cash of BT at its previously agreed level for the next three years.

However, BT is set to borrow £2bn by issuing bonds and paying it straight into the pension deficit. The said bonds will be acquired by the pension scheme itself.

https://news.finance.co.uk/bt-cutting13000-jobs-quit-hq-london-cost-cutting-drive/

 

 

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1 hour ago, oatbake said:

BT are awful and have bigger problems than expensive London offices. I complained about some charges that were blatantly unfair/illegal and their customer support team were simply not interested in my complaint. 

The result? I took it to the ombudsman who promptly ordered them to cancel all outstanding charges (£75) and awarded me £30 compensation for my trouble. Now I'll also never use them again. All of this cost BT a £600 case fee, which they'd have to have paid even if the Ombudsman had agreed with them.

Well done. I've taken banks to the Financial Ombudsman when I've been wronged, and knowing about that fee is key. The FOS put massive pressure on me to accept the "interim findings" of their Adjudicator, which would have meant the bank didn't have to pay the fee. This is the "first stage" Adjudicator which is NOT a real Ombudsman: these people are Gatekeepers whose sole job is to dissuade you from raising a proper case with an Ombudsman. "No, I want it to go through to an Ombudsman" I said. "But you'll only get the same result, you need new evidence" they said. Tough. I insisted, and it went through to a real Ombudsman. I still lost but I had the glowing feeling of knowing the bank could lost £750 in fees (I think) as well as the paltry £50 they had initially offered me in compo which they were ordered to pay. If they'd been more generous and contrite, like other banks were for the same offence, I wouldn't have bothered.

 

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8 hours ago, Mikhail Liebenstein said:

My hear bleeds: https://www.standard.co.uk/business/bt-restructure-the-property-billionaires-hit-by-telecom-giants-move-to-reduce-estate-a3835476.html

What I find particularly quaint is the belief that they’ll be ok as they mostly own exchanges. Obviously they don’t understand modern networks and what those green cabinets can do these days and . Suspect they think there are full of ladies, with 1950s plum voices, sticking connectors into a switchboard.

There are loads of telephone exchanges all over the place. There's one quite near my house - it's massive 

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I'm saddened to see the trouble BT is facing. Obviously not a perfect company, but it is tax registered in the UK, pays decent wages, has retirement scheme goes up to a 10% employer contribution from what their job adverts say which is better than many, very active apprenticeship schemes (proper ones, that pay and train in an actual career), and employ lots of people outside of London. Whilst not a factor for serious consideration, if you look BT up on the gender pay gap, incredibly British Telecommunications PLC pays women more than men on average, I can't find any other big name Telco close to even! It's Openreach business seems the only one consistently bidding for rural area provision so I'd conclude other Telco's don't think they can make money / can't accept whatever government T&Cs are attached to the subsidy.

I've never had an issue using them, though I fully believe some have had bad experiences which sadly is inevitable with most big organisations. BT strikes me as a company struggling due to the length of time its been going (old pension scheme seems costly - made worse due to BoE unprecedented decade of record breaking low interest rates) and it's history as the state monopoly meaning and the regulator keeping a very tough watch on it. Hopefully it can be turned round, as I feel any replacement would not have some of the more admirable aspects BT has.

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Friends of mine on the other hand have nightmares. BT have taken the government's money to upgrade their infrastructure for "super-fast broadband", and then not done it. This is in Birmingham, Britain's second city NOT a rural area, and whilst I've got 76Mbps my friends living 3 streets away on a different cabinet get just 1.5Mbps ADSL. Every time broadband is in the news, the focus is on rural areas and there are millions of people in big cities screaming blue murder at BT's despicable behaviour. The politicians are completely ineffectual. The media are useless and ignore this issue, they only ever talk about remote rural areas and imply dishonestly that everything is fine if you live in a populated area. Deadlines of 2016, 2017, 2018 all slip by and BT refuses to upgrade that cabinet. They've had to move house to get faster internet. BT have blocked his every attempt at the highest level for them to actually do what they've taken the government's money to do.

Edited by mrtickle

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that's a real shame to hear. Incredibly these days it is quite a significant factor for a house and one that is probably difficult to appreciate until you have no minimal service for a long time. Where were the other Telecom providers in providing service? I never hear people blaming a lack of broadband on Virgin or Talk Talk.

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16 minutes ago, Save me from the madness! said:

that's a real shame to hear. Incredibly these days it is quite a significant factor for a house and one that is probably difficult to appreciate until you have no minimal service for a long time. Where were the other Telecom providers in providing service? I never hear people blaming a lack of broadband on Virgin or Talk Talk.

Virgin cabled one half of the street but not the other half.

The half that had two services, got upgrades to by both providers ("competition") to 76Mbps and 300Mbps respectively.

The half of the street served by BT's cabinet, got no upgrade, and BT cynically took the government money under false pretenses and no-one is forcing them to upgrade that cabinet. Everyone is stuck on a shitty 1.5Mbs

The difference is that the other providers are not regulated so can take business decisions as they see fit: BT is SUPPOSED to be accountable to the taxpayer for that super-fast broadband upgrade money, and the householders are being let down by BT, by the regulator, by all the politicians, and by all the media.

 

Edited by mrtickle

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My dealings with BT both as a customer and a specialist supplier suggest that these building leases will just be the tip of the iceberg. While I don't get any pleasure from seeing companies struggle, BTs problems are self inflicted.

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I think I'm right in saying that BT were one of the first to offshore contact centre jobs a few years back. Ultimately, you get what you pay for, and BT have been haemorrhaging customers due to poor customer service. It's great when things are going well but as soon as things start to go wrong... From a customer's point of view, there was no accountability or ownership of problems. You would find yourself explaining the same situation three or four times to different representatives and nobody was really interested in solving your problem, just parroting the same scripted answers. Promised call backs never came. 

Although that said, the experience was not much better when dealing with their UK-based staff... Engineer turned up for a cancelled appointment (they'd even texted to confirm the cancellation a couple of days beforehand). Again, nobody really interested. It made me wonder how a company can be organised so badly. A real shambles.

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30 minutes ago, oatbake said:

I think I'm right in saying that BT were one of the first to offshore contact centre jobs a few years back. Ultimately, you get what you pay for, and BT have been haemorrhaging customers due to poor customer service. It's great when things are going well but as soon as things start to go wrong... From a customer's point of view, there was no accountability or ownership of problems. You would find yourself explaining the same situation three or four times to different representatives and nobody was really interested in solving your problem, just parroting the same scripted answers. Promised call backs never came. 

Although that said, the experience was not much better when dealing with their UK-based staff... Engineer turned up for a cancelled appointment (they'd even texted to confirm the cancellation a couple of days beforehand). Again, nobody really interested. It made me wonder how a company can be organised so badly. A real shambles.

They are hiring 3,000 engineers and sacking 13,000 back room office staff. Problem has been too many chiefs and not enough Indians.

I read somewhere thar there were 7 pay grades above engineer and that was  mainly the backroom middle management office jobs. 

They are supposed to be a tech company but I suspect  BT has gone awol from accountability to shareholders and set up some sort of job creation scheme for middle managers.

Smacks of Carillion and Capita tbh.

Edited by crashmonitor

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4 hours ago, crashmonitor said:

They are hiring 3,000 engineers and sacking 13,000 back room office staff. Problem has been too many chiefs and not enough Indians.

I read somewhere thar there were 7 pay grades above engineer and that was  mainly the backroom middle management office jobs. 

They are supposed to be a tech company but I suspect  BT has gone awol from accountability to shareholders and set up some sort of job creation scheme for middle managers.

Smacks of Carillion and Capita tbh.

Going back to one of the many crises they’ve had over the years. A decade or so ago they had some issues. They bought in Deloitte to help sort it out. One of my mates worked on it. Apparently there were several cases of people being paid and no one knew where they were. They collected their not unsubstantial middle manager salaries and didn’t even bother turning up most of the time. 

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10 hours ago, Castlevania said:

Going back to one of the many crises they’ve had over the years. A decade or so ago they had some issues. They bought in Deloitte to help sort it out. One of my mates worked on it. Apparently there were several cases of people being paid and no one knew where they were. They collected their not unsubstantial middle manager salaries and didn’t even bother turning up most of the time. 

This all too common in both public and private sectors once you're "in," with the right people

Horrendous.

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On ‎12‎/‎05‎/‎2018 at 13:44, Democorruptcy said:

How does this work? It sounds very Enronesque or Barclays Protium style?
 

 

I'd guess the market believes a combination of... the Co' overstating its real profits (for example accounting treatment of assets, not facing up to pension fund deficit) AND not being able to sustain those profits. Irrespective, jettisoning 13,000 won't be cheap. Taking a guess at £20,000 a head that's £260m. It could well be more, as it'll inevitably be the older longer service employees who can take final and average salary pensions early who take redundancy 

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12 hours ago, Castlevania said:

Going back to one of the many crises they’ve had over the years. A decade or so ago they had some issues. They bought in Deloitte to help sort it out. One of my mates worked on it. Apparently there were several cases of people being paid and no one knew where they were. They collected their not unsubstantial middle manager salaries and didn’t even bother turning up most of the time. 

I’ve worked with BT on and off, and I heard rumours there was a programme for reallocating managers/staff to a temporary no work assignment, where they do a bit of training and still get paid. This was to allow time to identify and train for the next role. However, rather than being temporary, it became permanent- some of the staff doing 6 month of no work before being reassigned again to the programme. Some had been on it for almost 10 years.

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19 hours ago, mrtickle said:

Friends of mine on the other hand have nightmares. BT have taken the government's money to upgrade their infrastructure for "super-fast broadband", and then not done it. This is in Birmingham, Britain's second city NOT a rural area, and whilst I've got 76Mbps my friends living 3 streets away on a different cabinet get just 1.5Mbps ADSL. Every time broadband is in the news, the focus is on rural areas and there are millions of people in big cities screaming blue murder at BT's despicable behaviour. The politicians are completely ineffectual. The media are useless and ignore this issue, they only ever talk about remote rural areas and imply dishonestly that everything is fine if you live in a populated area. Deadlines of 2016, 2017, 2018 all slip by and BT refuses to upgrade that cabinet. They've had to move house to get faster internet. BT have blocked his every attempt at the highest level for them to actually do what they've taken the government's money to do.

I can believe that. I live in the center of Nottingham and my block didn’t have enough lines in the nearby cabinet for for half the flats to even get a phone line and did nothing about it. Anyway Hyperoptic saw the opportunity and swooped in. Now everyone has 1 gigabit connections for 1/2 the price of BTs ‘super fast’ (LOL) broadband.

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1 hour ago, monkeyman1974 said:

I'd guess the market believes a combination of... the Co' overstating its real profits (for example accounting treatment of assets, not facing up to pension fund deficit) AND not being able to sustain those profits. Irrespective, jettisoning 13,000 won't be cheap. Taking a guess at £20,000 a head that's £260m. It could well be more, as it'll inevitably be the older longer service employees who can take final and average salary pensions early who take redundancy 

I was wondering specifically about this bit:

Quote

However, BT is set to borrow £2bn by issuing bonds and paying it straight into the pension deficit. The said bonds will be acquired by the pension scheme itself.

BT has an £11bn pension deficit, it's borrowing money to plug £2bn of it. Isn't BT making it's overall position worse by adding borrowing interest to £2bn or is the pension fund buying the bonds, not paying interest or handing it back? Then it would be like BT doing it's own QE?

It's making me think about Barclays. At the height of the financial crisis looking at the figures Barclays was bust. They had a huge amount of non-performing assets. They bundled these up and sold them to Protium. Protium was run by the same people who had managed the same non performing assets at Barclays. Barclays loaned Protium the money to buy the non performing assets. It was a fiddle creative accounting to make Barclays look to be in a better position.  Obviously all within the rules.

 

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On 13/05/2018 at 08:29, Save me from the madness! said:

British Telecommunications PLC pays women more than men on average

That's all you need to know to short the stock.

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2 minutes ago, Locke said:

That's all you need to know to short the stock.

Well no because men only do the yucky jobs like drive vans and work on cables.

Communications is 21st century tech you know. I think they just have the vans and overalls for nostalgic purposes 

The women do the important stuff.

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On ‎13‎/‎05‎/‎2018 at 13:22, mrtickle said:

 This is in Birmingham, Britain's second city NOT a rural area, and whilst I've got 76Mbps my friends living 3 streets away on a different cabinet get just 1.5Mbps ADSL. .

They've had to move house to get faster internet.

Is it really that bad not having fast broadband?  we all seemed to survive ok with dial-up modems, and in pre-internet times.

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  • 301 Brexit, House prices and Summer 2020

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