BT Rights Issue to Proceed
BT has announced that it will demerge its wireless division and proceed with a rights issue. The markets response to the BT announcement was to further decrease BT's share price.
BT is also planning to sell its London headquarters building and has already sold off stakes in telecom operators in Japan, Spain, and Malaysia. Shareholders will be offered new stock at a reduced price, or will be able to sell their right to buy the new BT stock at the discounted price. Many small shareholders in BT are furious about the loss of a dividend on BT shares.
Emerging from its recent action against its debt, is a much smaller and poorer telecom operator, stuck with outdated copper lines, and technologically behind most other operators in Internet technology offerings. BT debt still remains substantial, even after recent measures to reduce the mountain.
Following the dispatch of Vallance, BT has demonstrated a fortitude for self preservation, yet the other reprobate, Bonfield, remains. Until he is gone and replaced by someone technologically literate, BT is expected to continue to be lost for direction.
Most technologically literate people will agree that the future of voice communications lies in broadband, with video on demand and voice over IP. Clearly it is not theoretically possible to use copper cabling for the services of the future, even if the maximum possible bandwidth of copper cabling were to be used in an environment completely free from electrical noise. The longer BT decides to procrastinate on the installation of fibre, the less they will be able to recover from subscription costs when the boom in broadband technology use finally hits the UK. BT will be left as a minority player. BT can't hold up worldwide developments in broadband technology; they can only damage the UK's chances of being able to compete worldwide on a level playing field with foreign companies. If you have the choice, we urge you to boycott BT as a telecom provider and help to bring about the end of the BT monopoly of local telecom services.