ALEX BRUMMER: BT needs British backers to bring ultra-fast broadband to the country
BT boss Philip Jansen has been looking for an outside investor to speed up and fund ultra-fast fiber doors by a £ 19 billion telecommunications giant for some time.
This was one of the factors that hastened the resignation of Jan du Plessis as chairman. But no one expected the cavalry to arrive so quickly.
Franco Israeli communications billionaire Patrick Drahi has offered to take a 12.1% stake in BT for £ 2.2bn without warning and sit down with Janssen and the board to discuss the future. ..
Rollout: BT Openreach is fully committed to improving the UK’s broadband network and is obliged by the government to introduce fiber to neglected rural areas.
He boldly says he wants to help Openreach, a branch of BT infrastructure, achieve its ambitious goal of supplying fiber to 25 million UK homes by 2025.
Given the £ 3bn annual cost, which is about half of BT’s underlying revenue, this is no easy task.
BT currently has two strategic investors in the form of Altice Europe principal Drahi and Deutsche Telecom, which holds a 12.06% stake.
It’s not clear how Janssen can help dry power and unleash value from fibers.
However, Drahi has a history of financial engineering, removing infrastructure assets and bringing in private equity money.
He is a huge player in this field and owns France’s second largest network SFR and telecommunications assets across Western Europe, Israel and the Caribbean.
Occasionally, his debt-fueled private-equity approach forced executives and assets to be destroyed in order to repay the loan.
A billionaire investor who owns the trophy asset Sotheby’s has promised that his assault is not a prelude to a full-scale acquisition.
It would be amazing if he didn’t use his weight to require at least one seat on the BT board.
It will give him a platform for the kind of ruthless cost savings he designed in SFR, where staff were reportedly aware they were scrambling themselves to replenish toilet paper and printers. I am.
The dry timing is good. The long and disgraceful decline in BT’s stock price has stopped.
It benefits from Janssen’s decision to offload the expensive sports TV franchise, lower-than-expected prices paid for 5G bandwidth at recent spectrum auctions, and relaxed price controls by regulator Ofcom.
He also strikes when the board sways. Bidding and trading veteran Du Plessis still exists and the search for the next chairman continues.
Former Kingfisher boss Ian Cheshire is backed by Janssen, but his candidacy is pending and former part-time Iain Conn (former Centrica) is searching.
The UK’s aging ultra-fast broadband networks have been pandemic and lasted longer than expected, but given the widespread adoption of digital services and telecommuting, they are not suitable for the purpose.
Compared to South Korea, Japan and even Spain, the pace is far off. Openreach is working hard to catch up and has a government obligation to bring fiber to neglected rural areas.
It faces formidable obstacles. In urban areas such as London, many landlords eventually live abroad, many in tax havens in the British Virgin Islands, so they have access to multiple resident office and apartment blocks. Is very difficult.
We are pressing Downing Street to amend the law, and Downing Street can enter such sites as long as the residents agree.
Erosion of UK telecommunications equipment manufacturing bases means that most of the fibers and technologies, such as the boxes used to distribute fibers in flat blocks, need to be procured from Corning and other overseas suppliers in the United States. Means.
Supplier Vauxhall does not produce EV vans in the UK, so even simple tasks such as replacing UK-made diesel trucks with electric vehicles to meet carbon dioxide emissions targets can be difficult.
Brexit offers the UK a great opportunity away from the bureaucratic intervention in Brussels. It’s puzzling and sad that BT has to respond to foreign investors with different reputations to shake things about critical infrastructure updates.
That the UK’s huge fund management industry is on a par with the lack of curbs set by Brussels, and that investing in next-generation R & D and equipment has the real opportunity to shake the poor-performing giants such as BT. I’m sorry to recognize it. And infrastructure.
ALEX BRUMMER: BT needs British backers to support fiber broadband deployments
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