bluedonkey wrote:The outlook could be a slowly declining, periodically failing, business. This would justify the current price.
The issue with BT unlike the vast majority of other companies out there, it cannot be allowed to fail due to it's (almost) monopoly stake in the UK's telecommunications infrastructure.
I hold (and bought more at the end of March) and am looking at this as a longer term recovery opportunity.
In the near term, I expect BT's market to hold up, unlike many other businesses. A world of confinement, and videoconferencing from home, is not one where I expect lots of people to be economising on the their broadband.
Longer term, investment in 5G by cellular operators (of which BT is one) will be driven by smaller cells in the radio network, knitted together with a fibre backbone. They are well positioned for this.
One of the COVID imponderables is how much it will thin the ranks of pension liabilities by the time it is all over.
Also, the corresponding inflationary surge and increase in rates that feels almost inevitable over the 3-5 year horizon would do much to reduce the deficit.
Very uncertain future, but one with sufficient upside to be worth hanging onto.
The issue with BT not being allowed to fail is not to do with their near monopoly market position (assets could be resold) but the political storm that would result from letting an army of semi-civil service pensions that have been parked there go tits up.