OneTel Increase Line Rental Prices.

paul_h

Steve_xx wrote:

Good, I'm glad you don't want to kill BT, because that would be a disaster for the UK. BT pays taxes on its profits, and that means that unlike in the old days when BT was state run, you and I do not have to support it and its rather lacklustre workforce via our taxes.

BT was taken from public ownership because it was the only part of the GPO that was actually making a healthy profit - it was part of the first raft of privatisations which had to be a success. I'm not against BT as a privately owned business, but BT was fortunate to inherit the infrastructure which any other operator would need to be able to launch a competing service, and have used this to their advantage for many years. Although not perfect, the Transco and National Grid models seem better for consumers.

BT probably does pay more in tax now than it contributed to the support of the GPO, but unfortunately it is at the expense of the consumer. Shareholder profits have to be paid, and will always be maintained.

Steve_xx wrote:

I agree that as an entity that BT is not perfect, and at the point of deregulation more ought to have been done to promote competition, especially in the area of local loop unbundling. This is of course with the benefit of hindsight.

OFTEL were pretty good at regulating telcos and particularly BT. The problem we have now with OFCOM is that it is has much wider responsibility and this has not boded well for regulation of telecoms in my view.

I think you're right.

Steve_xx

paul_h wrote:

BT was taken from public ownership because it was the only part of the GPO that was actually making a healthy profit - it was part of the first raft of privatisations which had to be a success. I'm not against BT as a privately owned business, but BT was fortunate to inherit the infrastructure which any other operator would need to be able to launch a competing service, and have used this to their advantage for many years. Although not perfect, the Transco and National Grid models seem better for consumers.

BT probably does pay more in tax now than it contributed to the support of the GPO, but unfortunately it is at the expense of the consumer. Shareholder profits have to be paid, and will always be maintained.



I think you're right.

When it was joined to the GPO, BT did not always make a profit. The pair used reguarly to turn in losses so great that they and their huge workforces had to be sustained via the taxpayer. Only latterly did BT become profitable, before being sold off.

I agree with your comment that BT was fortunate to inherit the infrastructure that it did. But if BT had not inherited it, then who would? I think it has performed rather well.

I disagree with your comment that BT pays more in taxes and dividends at the expense of the consumer. Its shareholders are the owners of the company and they have a right to expect that the company will reward them for investing in it. If you owned a corner shop you would expect it to run for a profit and you would be very happy to realise the profits from your efforts. Unless of course you were especially benevolent and you wished to run your business for no personal profit. Investors who put their money into companies have similar expectations, and rightly so, since this expectation in itself serves to motivate the management of the company.

As a result of competition the price of telephone calls in general has never been lower. In the 1960's it cost £1 per minute to call a number in the USA. Today, you can make the same calls for as ittle as 1p per minute. This is, at least in part, due to competition in the industry.

paul_h

Steve_xx wrote:

When it was joined to the GPO, BT did not always make a profit... Only latterly did BT become profitable, before being sold off.

I would agree that the GPO was a poor business, but as you say the BT business was very profitable at the time of privatisation.

Steve_xx wrote:

But if BT had not inherited it, then who would? I think it has performed rather well.

Any company operating the infrastructure would still need effective regulation - after all, it would still be a monopoly. So, you are probably correct - I think the issue of ownership is not so important as effective regulation.

Demand for new services fuels growth and investment, but BT does no more than is necessary in response to market developments. France Telecom has been state owned during the time BT has been private, and the telecoms systems in France are more advanced than here - for example with 'fibre into the home' connections for high speed data services - BT are currently doing limited trials, whereas FT are actually in the process of installing the infrastructure.

Steve_xx wrote:

Its shareholders are the owners of the company and they have a right to expect that the company will reward them for investing in it.

BT makes massive profits and continues to pay record dividends year on year, but as a CPS user, my line rental would have effectively increased by around 50% in the space of a few years. An ex-state owned monopoly which provides an essential public service needs effective regulation.

Steve_xx wrote:

As a result of competition the price of telephone calls in general has never been lower...

I think technology has had a greater impact, prices have moved broadly in line with other countries which have always had a competitive telecoms market.