BT Encouraged by Court’s ruling on pension scheme
The top-up payments can be easily cut to size as BT is in a stronger position now. The change has been made in its pension scheme following a landmark court ruling stipulating that the taxpayer must underwrite most of the fund’s liabilities if the company collapses.
Mr Justice Mann ruled in favor of BT, finding that the government insures 98% of the pension scheme’s members against the company’s insolvency.
According to Analysts, the High Court ruling about the sweeping scope of the crown guarantee underpinning BT’s pension scheme meant that its trustees might take a less prudent approach to repair the fund’s deficit, which stood at £9bn at end-December 2008. BT shares closed up 4% at 156.3p.
BT’s pension scheme to avoid oversight by the Pension Regulator can also be permitted by the court, which has expressed substantial concerns†about an agreement between the company and the trustees to remedy the £9bn deficit.BT cut its dividend by 59% in 2008-09 partly because of the need to increase the annual top-ups it pays into its pension scheme from £280m to £525m.
The company has not reached to any agreement with the government on the extent to which the crown guarantee finalized at BT’s privatization would cover its pension scheme liabilities.
The court is in favor of BT, rejecting the government’s argument that the guarantee did not cover the retirement benefits of employees hired after the company’s flotation in 1984.
According to the judge, the government’s liability arising under the guarantee was not confined to members of BT’s pension scheme at privatization. Those who joined the scheme after privatization were capable of being included within the government’s liability. About 20% of the scheme’s liabilities relate to members who joined after privatization.
BT is to review with its lawyers whether the Pension Regulator still has jurisdiction over the pension scheme following the court ruling.
If the regulator did not supervise BT’s scheme, the trustees could spread deficit repair payments over a long period.
According to John Ralfe, a pension’s adviser is in a fix with BT’s scheme would be allowed to escape regulatory scrutiny on competitive grounds. Should the ruling enable BT to make lower top-up payments than it would otherwise have done, European regulators were likely to deem it unlawful state aid.
BBC to finance super-fast broadband in Rural areas
The BBC license fee over the next seven years has complied up to £830 million to help finance the expensive task of building superfast broadband networks in rural areas.
George Osborne, chancellor, announced in his complete spending review the location of four pilot projects that ministers hope will serve as models for how the public and private sectors should collaborate to build high-speed broadband networks in rural Britain.
The projects will be in the Highlands and Islands, North Yorkshire, Cumbria and Herefordshire. Broadband infrastructure is extensively seen as an important driver of competitiveness and innovation, and according to Mr Osborne, the government’s plans should help nurture creative industries such as advertising and media.
Ministers are particularly anxious to evade superfast broadband networks being confined to towns and cities, and are hoping that companies including BT can be persuaded to expand their high-speed infrastructure to rural areas by tapping public money.
BT, the UK’s leading fixed-line phone company, has constantly insisted that it cannot cover the cost of extending its urban-focused high-speed network to rural areas without some public funds. The government, after rejecting the former Labor administration’s plans for a telephone tax to fund superfast broadband, has instead chosen to take money from the BBC license fee.
According to Mr Osborne, the BBC would contribute £530 million from its license fee to superfast broadband by 2015, but the total could rise to £830 million by 2017.
BT welcomed the government’s pledge, and according to BT, the £530 million outlined by Mr Osborne would undoubtedly play a part in extending high-speed networks based on optical fibre.
Mr Osborne announced that BT and Virgin Media, the cable television operator, are both interested in participating in the four pilot projects.
BT is spending £2.5 billion on a high-speed network that should cover 4 million of the UK’s 26 million homes by the end of this year. The infrastructure should reach 17 million homes by 2015.Virgin Media’s superfast network covers 12.7 million homes, mainly in towns and cities. It is interested in expanding the infrastructure into rural areas, partly by tapping public funds.
According to Virgin, there’s a real opportunity to look at each area and ensure any public money is used to help find the best possible solution to benefit the local community.
The government’s plans are partly planned to ensure that all homes have broadband speeds of about 2 MB/ second by 2015, which is sufficient to watch video over the internet, such as the BBC iPlayer. An estimated 2 million homes do not have basic broadband of 2 MB/s.
The government also announced plans to sell a large chunk of radio spectrum currently used by Whitehall departments including the Ministry of Defense over the next decade. Some of the 500 megahertz of spectrum could be suitable for enabling web surfing on smartphones and laptops.
Wireless Operators: Potential equipped to manage cloud computing, as the market warms
If reports are to be believed, the big-brand global telcos are positioning themselves to be tough players in the cloud computing market as corporate attitudes to cloud warm.
According to researchers Ovum, AT&T, BT, Orange Business Services and Verizon Business could compete with established players from the IT industry in the cloud computing arena.
The telcos have a long heritage in providing managed end to end networks, data center services and hosting and have combined this with their networking and security expertise to meet the needs of customers for cloud computing services.
Some observers have considered the telcos might not fare so well in some parts of the cloud computing ecosystem, mostly in parts of the ecosystem requiring more application expertise. Telcos are well familiarized to organizing mission-critical data centers. That, in essence, is what modern switching and routing facilities are.
Telcos are bound to succeed here because they already have many of the key skills on tap the market. They have a long heritage in the managed data centre and hosting businesses and when you put this together with their networking and security expertise it starts to look like a strong package.
The key for the telcos is the ability to offer end-to-end management of the network. This attracts mostly to large corporate and big companies with mission-critical applications.
Reimbursing a long-term path to offer improved service for Cloud connections along with standard Internet access was most probably one of the ideas in the back of the collective mind of Verizon when it stroked out its ‘joint statement’ with Google on Internet neutrality.
Certainly, the ability to offer something in between an enthusiastic but expensive end-to-end network, and a cost-effective but much cheaper Internet access offer would clearly be another big plus for carriers eyeing up the corporate cloud market and wanting – in the US at least – to make sure they didn’t run into regulatory problems through offering enhanced quality of service.
European Commission allows BT for ‘Virtual’ fibre unbundling
www.WirelessFederation.com/news: The European Commission (EC) has ruled that British fixed line incumbent BT will be required to allow rivals access to its under-construction super-fast broadband network. The telco will also have to allow for the physical unbundling of its fibre network in much the same way as its competitors have access to its legacy copper infrastructure at present.
The ruling of UK telecoms regulator Ofcom that will temporarily allow BT to only offer a ‘virtual unbundling’ of the fibre network on the proviso that full unbundling follow as soon as possible has also been endorsed by the EC.
According to European Commissioner for Digital Agenda Neelie Kroes, in this specific instance, virtual unbundling seems the best option to safeguard competition and enable consumers to benefit from a wider range of services provided over next-generation fibre infrastructure and added that this interim solution is not a long-term alternative to physical fibre unbundling, which should be imposed as soon as possible.
It is because of this reason that Ofcom’s proposal for BT will apply for the next four years, depending on how the market develops.
S Tel plans to invest $1.4b in 3G (India)
www.WirelessFederation.com/news: An investment of 700 crore($1.4 billion) for acquisition of 3G spectrum and roll out of services in India has been announced by telecom operator S Tel, a joint venture between the Siva group and Bahrain-based Batelco.
Rs 338 crore is planned to be raised by the company through a 1:1 debt to equity ratio towards license fee payment for the three circles of Bihar & Jharkhand, Odisha and Himachal Pradesh.
The company has already tied the debt with Indian nationalized banks through a bridge loan and the company is set to meet the timelines stipulated by the Department of Telecom.
BT integrates cloud-based phone service for MNCs
www.WirelessFederation.com/news: Integration of Ribbit technology with Onevoice VPN offering aimed at multinational corporate customers has been announced by telecom operator BT.
The new cloud-based voice service, Onevoice Ribbit 1.0, is capable of directing all incoming and outgoing calls a multitude of different ways allowing users to conduct voice calls via any mobile, fixed-line or softphone from a single number. Ribbit is said to be effectively connecting these devices to the customer’s Onevoice VPN by pushing out calls to any device, thus reducing their overall calling costs.
According to Simon Farr, head of marketing, unified communications and collaboration at BT Global Services, it pushes all calls in to Onevoice VPN to Ribbit which can be set up to direct it however you want, for example to a different office or to a hotel room, or a mobile and it keeps more traffic on-net and therefore cuts down on the use of high-cost international long-distance connectivity.
Web-based interface can be used by the consumers to configure Ribbit. Ribbit is capable of making multiple devices ring simultaneously and it can also transcribe voicemails and deliver them as emails or texts, or convert them into audio files, reducing the number of calls into the corporate voicemail system.
No investment in any additional equipment is required by Onevoice users in order to get up and running with Ribbit. Onevoice customers can start the journey to unified communications and accelerate the adoption of communications applications to the desktop, the moment Ribbit is delivered to them.
The offering is targeted to MNCs, typically corporations with employees that are frequent travelers, with an aim to achieve more usage from their Onevoice VPN tariff. Corporations looking to set up temporary sites are also the target.
As per Farr, Onevoice Ribbit 1.0 is currently undergoing beta trialing with a small number of BT Onevoice customers, and a full release is scheduled before the end of 2010.
Orange UK to divest fixed line network to BT
www.WirelessFederation.com/news: After completing its merger with rival T-Mobile UK, mobile network operator Orange UK has now decided to divest its fixed line infrastructure to incumbent BT Group. Cutting losses has been cited as one of the reason why Orange has taken the decision to abandon its own network.
Under the terms of the agreement between the two companies BT will take over and integrate Orange’s existing fixed line infrastructure. Fixed line voice and high speed internet will be offered by the telco over BT’s network, a move which is expected to almost double its broadband footprint.
Transfer of 61 staff will also take place to BT as a part of the deal. T-Mobile may look to launch an own-branded broadband offering as a result of the BT/Orange tie-up. Orange has been the fifth largest operator by subscribers in UK with 840,000 broadband subscribers. However, 137,000 customers were lost by the company in the last 12 months leading it to conduct a review of its broadband offerings.
According to Bruno Duarte, Orange’s vice-president of strategy, the company is not satisfied with where it stands with broadband, as its customer base is declining and its performance is poor. But the company needs to remain in fixed line broadband so decided to fundamentally change what they were doing.’
BT should share underground ducts, telegraph poles, says regulator
BT Group PLC will have to share its telegraph poles and underground cable ducts with its rivals under new proposals put forward by regulator Ofcom to encourage competition and boost the introduction of a super-fast broadband network.
The competitors will now be using BT’s network of poles and ducts to lay their own fibre-optic cable, while BT will provide information about the space availability and the quality of ducts and poles.
According to Ofcom half of the duct network may have room for additional cables. As per the regulator, BT should also open its fibre lines so rivals firms can provide their own services to consumers.
At the same time, BT group seemed to be happy enough with the new proposals as it would enable it to recover market share lost to rivals in recent years.
BT Ireland to roll out ‘Etherflow’
www.WirelessFederation.com/news: The latest phase of the 21st Century Network (21CN) rollout has been launched by telco BT Ireland along with the deployment of NGN Etherflow fibre/radio access equipment at select points across Ireland.
A number of Etherflow points across the country is intended to be expanded by BT. The next generation access infrastructure will also be opened by Eircom to rivals in the coming days.
BT Etherflow is a scalable technology that can grow with a business at a lower price per megabit than existing network services. BT would be enabled to provide an end-to-end network service with the help of this Etherflow besides providing local access circuits at one end and seamless connectivity to BT’s global networks at the other.
BT to launch fixed telephony in Brazil
www.WirelessFederation.com/news: Launch of commercial fixed telephony service in Brazil has been planned by UK-based telecoms operator BT Group by next month. The new service is said to be set and complete and ready for the launch.
The initial focus will be on the corporate group although any comment on any goals for 2010 in terms of subscriber numbers is declined by the company. NGN infrastructure provided by domestic equipment manufacturer Tropico will be utilized by BT Brazil to provide the new service. Sao Paulo, Rio de Janeiro and Curitiba will receive the service initially.
According to BT Brasil general director Sergio Paulo Gallindo, with this launch the firm will complete its portfolio in Brazil, offering a unified communications solutions for the enterprise segment.
