BT claims Labor nationalization plan would cost up to £ 100bn – business live – The Guardian, Theguardian.com

Labor has said web companies like Amazon, Facebook and Google, would foot the bill for the nationalized British broadband company’s annual maintenance costs.

Those operating costs are estimates at about £ 230 Year.

McDonnell told Sky News:

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These companies now have to pay their fair share … no more sweetheart deals.

My colleague Rowena Mason has further details here:

Investors are considering which other UK firms could be candidates for nationalization.

Some of the names being bandied around includeRoyal Mail(privatised fully by 2015) andRoyal Bank of Scotland(which is still 62% owned by the government following its bailout in 2008).

Michael Hewson, chief market analyst at CMC Markets, says:

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BT expressed surprise at last night’s announcement having been assured by Labor fairly recently that they weren’t being considered as a nationalization candidate.

With other companies also being told the same thing by the Labor Party, investors will no doubt be looking very carefully at other possible candidates for nationalization, and whether they need to be concerned.

Companies like Royal Bank of Scotland, National Grid, Centrica, Severn Trent, Royal Mail as well as the rail company franchisees, like Go Ahead Group and National Express to name but a few, are already trading at a nationalization discount.

For now, given Labor’s current polling numbers the concern is fairly minimal, and investors will be hoping it stays that way, which helps explain the fairly muted share price reaction.

BT rival TalkTalk is holding off on a decision to sell its own infrastructure arm to see how this whole Labor plan pans out.

TalkTalk chief executive Tristia Harrison told Reuters:

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Our discussions are very advanced, and yes, the news overnight of course is making everybody in the sector pause and consider.

We were really close, really close, but I think something of this sort that is in the news, obviously everybody is pausing, considering, digesting and working out what it means.

Sky News, which first reported the strategic delay, said CityFibre Holdings nearly signed a deal to acquire TalkTalk’s FibreNation on Thursday before Labor’s pledge was announced.

Mark Kleinman(@ MarkKleinmanSky)

Revealed: The sale of TalkTalk’s ultrafast broadband network, FiberNation, to Goldman Sachs-backed rival CityFibre Holdings has been delayed until after next month’s general election following Labor’s pledge of free broadband for all by 2030.https://t.co/8PSsGQgSol

November 15, 2019

More comments from Labor shadow chancellor, who is now speaking to Sky News.

He says the Labor pledge to establish a company called British Broadband from nationalizing BT’s Openreach, follows similar models in countries like South Korea.

John McDonnell confirms that the nationalization will be done by swapping investors ’BT shares for UK government bonds.

He adds that parliament will determine the value and ensure it is “done with a proper price” and that government bonds will offer shareholders a “stable, long-term investment.”

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That’s exactly what pension funds and other shareholders are saying they need at the moment. It will be a good deal.

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We can’t afford not to do it … we’ve fallen behind global competitors.

He adds:

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I’ve been touring around the country and you know even in some of our city areas they’re not connected up … this is good for the economy.

Speaking to the BBC’s Today program, McDonnell has been clarifying Labour’s proposals, including that the part nationalization would only apply to BT’s broadband network operator Openreach.

My colleague Lisa O’Carroll has some of the details:

Lisa O’carroll(@ lisaocarroll)

John McDonnell says Labor is not “taking over all of BT “, simply taking over” Openreach “.. that’s the bit of BT hat maintains the telephone cables, ducts, cabinets and exchange and switches your broadband on or off through telephone cables .. (BT in old money).

(November) , 2019

Lisa O’carroll(@ lisaocarroll)

McDonnell says it can “come to an agreement” with Virgin , or others who are laying optic fiber.
Radio 4’s Justin Webb says “You are effectively closing them down”.
McDonnell says no.
Is it money?
We will make sure we have an agreement that allows us with full access rights

(November) , 2019

The reaction trickling out from analysts hasn’t been glowing so far.

There are concerns that ongoing efforts by the government and sector regulator Ofcom to incentivise fiber installation by rival operators could all be for naught.

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This is a spectacularly bad take by the Labor Party. The almost cut throat competition between broadband rivals has meant faster speeds, improved coverage and lower prices for consumers up and down the country.

The current government, and independent regulator Ofcom , have spent the last three years incentivising alternative operators to BT to deploy faster fiber technologies. Companies such as Virgin, CityFibre and others have committed billions to rival Openreach. Those plans risk being shelved overnight.

Only one other country in the world to come close to going down this route, and for a good reason – it’s hard, expensive and fraught with difficulty. Australia’s NBN is years late, massively over budget and offering speeds and technology a fraction of the original political intention.

BT shares have slipped at the UK market open, dropping more than 2%

It makes the telecoms firm one of biggest fallers on the FTSE 100 alongside Berkeley group down 1.7%. Fresnillo down 1.6% and Standard Chartered down 0.6%.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Overnight, UK businesses have been digesting Labour’s latest election pledge that would result in the part-nationalization of telecoms giant BT.

It is part of a plan to bring free full-fiber broadband to every home and business across the UK – but there’s clearly a question on costs.

The Labor party said theestimated capital costof rolling out full-fiber broadband was £ 15 bn, on top of the government existing £ 5bn earmarked for broadband expansion. This would be funded from its green transformation fund – paid for by borrowing.

But BT boss Philip Jansen has now weighed in and said the scheme would cost up to £ 100 bn.

Speaking to the BBC, Jansen said:

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These are very, very ambitious ideas and the Conservative Party have their own ambitious idea for full fiber for everyone by 2025 and how we do it is not straight forward.

It needs funding, it is very big numbers, so we are talking 30 to 40 billion pounds .. and if you are giving it away over an eight year time frame it is a another (or) billion pounds. You are not short of 100 billion pounds.

Dharshini David(@ DharshiniDavid)

Full-fiber broadband has become the latest election battleground. Labor pledges to roll it out nationally for free by part-nationalizing BT. But how big could the bill be –
and who’ll pay? Today’s business from# r4todayhttps://t.co/JiAIhoGnis

November 15, 2019

We ‘ ll continue to bring you the latest business reaction as we get it.

Also coming up …

The agenda

• 9. 30 am GMT: Eurozone inflation, final estimate for October
• 1. 30 pm GMT: US retail sales for October

(2.) pm GMT: US industrial production