Labour Policy and Openreach

Labour and Openreach Yesterday, HM Opposition said if it comes to power, it would nationalise parts of BT.

The shadow chancellor John McDonnell told the BBC the “visionary” £20bn plan would “ensure that broadband reaches the whole of the country”.

Some interesting facts that have not been considered by HM Opposition:-

The £20bn figure from Labour, compares to £30-40bn BT has said that it will cost to rollout fibre to the UK.

It is very ambigious whether the £20bn would also cover the cost of nationalisation, which according to Openreach’s regulatory accounts has a regulated asset value of c£13bn.

Labour’s estimated cost of maintaining Openreach at £230million pa compares to Openreach’s annual opex of about £2,000 million per year.

Any nationalisation would also have to consider many other complexities including what to do with the pension plan and the remaining business units not nationalised.

No mention about Debt’s fixed income, its debt position.

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