They should have linked to that on this forum then!

In reply to a post by Andrue:

In reply to a post by tommy45:

As for their "networking"issues Still ongoing for some,( the number of customers complaining has dropped off, but that is most likely due to them migrating to other ISP's, not due to them actually fixing anything)

That may be a factor but I know three or four people who were suffering it sporadically and all have told me recently that they've been incident free for far longer than before. I'm also a month 'overdue' for my occasional bad session. I think it would be safe to say PN have done something to their network that has improved things.

Would it? Seeing as they rely totally on BTW, it may be that some SVLAN's got re balanced or capacity added to them resulting from EU's from other ISP's complaining, So nothing to do with plusnet at all,
My issues where due to both the Plusnet's networking/shaping/capacity,& shadow IP profile, and BTW backhaul capacity issues because there was 2 entities it was impossible to know who was responsible ,
Plusnret IMO used this to their advantage, and never properly raised this with BTW
Something In was paying them for, that is how they failed me and probably lots of others, everything at plusnet seems to run at a snails pace if at all,

In reply to a post by mkelly:

Plusnet never had a sustainable business model. The overheads were too great. It was probably run subtly at a loss; allowing BT to steal market share and screw the competitors; while recouping all those losses through bumper profits raked-in at Openreach

That's a very definitive statement. Can you provide evidence?

What I'll say is that Plusnet has been profitable every year since 2007. Last year, EBIT @ £44.2m, previous year, £32.6m and here's last years numbers if it helps.

http://www.yorkshirepost.co.uk/business/business-new...

Not once since the BT acquisition in 2007 has it operated anywhere near a loss, subtle or otherwise. It is neither unsustainable nor loss making.

M

They sell their broadband for FREE and at unsustainable monthly subs prices, hence the long and unfair min term contracts, and their un competitive line rental prices, which are subsidising their freebee's, and without a doubt their CS has been run into the ground because of this

In reply to a post by Malwaremike:

I'd agree with both posts from Andrue. My Plusnet ADSL2+ has disconnected twice this year but restored after half an hour. I'm satisfied with it and consider our BB/calls package good value for money.

The Plusnet forum is full of moans by its very nature. One can't help noticing that many if not most complaints are related to Openreach no-shows, I wonder if other ISPs have as many problems with OR?

To sum up: PN is fine when it works, but trouble if you want a connection. I would go to FTTC simply because it's there, but not with PN. If it's not broke don't fix it ...

I don't doubt that other CP's get OR no shows too, but the question is is how many of plusnet's are due to their provisioning systems and staff negligence?

Although they managed to process my FTTC only order without issues, installed and working on the initial date given

Edited by tommy45 (Sun 22-Nov-15 19:23:09)

In reply to a post by tommy45:

They sell their broadband for FREE and at unsustainable monthly subs prices, hence the long and unfair min term contracts, and their un competitive line rental prices, which are subsidising their freebee's, and without a doubt their CS has been run into the ground because of this

It's not loss making though is it? They're just competitive against TT and Sky in the budget BB market. 25% gross profit sounds pretty good going for such low margins, when they're purchasing BTW/BTO services at the same regulatory cost levels as it's competitors.

BT's plans were obviously to use PN to keep the market share in the budget mass market without affecting the more "premium" BT Broadband offering. Seem's like the old PlusNET we used to know is never to be seen again.

In reply to a post by mabibby:

In reply to a post by tommy45:

They sell their broadband for FREE and at unsustainable monthly subs prices, hence the long and unfair min term contracts, and their un competitive line rental prices, which are subsidising their freebee's, and without a doubt their CS has been run into the ground because of this

It's not loss making though is it? They're just competitive against TT and Sky in the budget BB market. 25% gross profit sounds pretty good going for such low margins, when they're purchasing BTW/BTO services at the same regulatory cost levels as it's competitors.

BT's plans were obviously to use PN to keep the market share in the budget mass market without affecting the more "premium" BT Broadband offering. Seem's like the old PlusNET we used to know is never to be seen again.

Yea , they make a loss on their bb products, but they subsidise this with the high un competitive line rental and call prices,and things like the call set up fee (RIP OFF !!!) that both they and their brethren charge their customers
If your giving cash-backs and free or half price offers then the profits aren't coming from those sales But they do get profits from calls and line rental, without which they would have become another statistic like 02/be,

Edited by tommy45 (Mon 23-Nov-15 16:09:43)

Plusnet line rental is £16.99pm. Sky Broadband requires £17.40pm line rental. TalkTalk Broadband requires £17.70pm line rental. IIRC O2/Be line rental wasn't hugely different from BT Retail, especially when you considered the overall cost of the phone service.

Your zeal in slagging off particular ISPs isn't always matched by your grasp of reality Tommy.

It is also possible to save a lot of money on Plusnet by taking one of the cheaper line rental companies like I do, and accepting the £2.50 extra cost on the broadband.

Is Plusnet sustainable? Does it stand on its own two feet? With a credible and independent business model of its own? Or is BT Group artificially subsidizing it? Perhaps through preferential terms arranged with Group suppliers like BT Wholesale? Or through subsidized intra-group loans issued by parent BT, maybe?

Questions that should be answered by a forensic accountant, of which I ain't.

Though it would be surprising if the Yorkshire Post, in its fawning business update on Plusnet, offered us any clues. Yorkshire is home turf for Plusnet; a major employer in both Leeds and Sheffield, and a regular advertiser in the local press; with favourable copy all bought and paid for.

Let's do a bit of research of our own though:

Plusnet is a wholly-owned subsidiary of BT Group; with turnover last year of £226.8m. Yet Plusnet appears only fleetingly in the BT Group 2015 Annual Report. Almost as if it doesn't exist. In the voluminous 237 page Report for 2015, just three references to Plusnet (see p.26, p.64, p.199).

The following few words being almost the sum-total that BT Group discloses about its £226m Plusnet operation (see p.64):

In reference to www.btplc.com/Sharesandperformance/Annualreportandreview/:

We also sell services through our Plusnet brand. This helps us grow our market share across the UK by addressing more price-conscious fixed-voice and broadband consumers.

Possible to say any less about a quarter billion pound enterprise?!

----

Let's get the Plusnet PLC Annual Reports from Companies House. The 2015 Report is here; with figures for 2014 here.

The first thing we note is that BT is using a (legal) fig-leaf to conceal important information about Plusnet:

The parent undertaking of the largest group of companies into which the results of the Company are consolidated is BT Group plc...
As a qualifying subsidiary, the company [Plusnet] will adopt a 'Reduced Disclosure Framework'."

Plusnet is operating in a "Reduced Disclosure Framework" for its financial reporting. Convenient..

The Report goes on..

Consequently, the Company is exempt under the terms of FRS 8 "Related Party Disclosures" from disclosing details of transactions and balances with BT Group plc, fellow group subsidiaries and associated undertakings, and those deemed under control during the year ended 31 March 2015.

"[Plusnet]... is exempt from disclosing details of transactions..with BT Group plc..and other subsidiaries"... Convenient, again..

What this means, in particular, is that it disguises any subsidies BT Group may be making to keep Plusnet artificially buoyant. That Reduced Disclosure Framework could be used to conceal intra-group loans issued to Plusnet. Loans allowing Plusnet to continue trading when it may otherwise not be solvent.

Indeed we can see from Plusnet's Balance Sheet that it took on another £36m of borrowing; an increase of 62% on the previous year. Those new creditors not identified, but Plusnet has this to say about intra-group loans:

Amounts owed by group undertakings are unsecured, have no fixed date of repayment and are repayable on demand. Interest is charged at agreed group rates.

In other words, that intra-group lending is on highly preferential terms. Loans made at undisclosed but doubtlessly favourable rates (interest free?) and with "no fixed date of repayment". That is not financing on genuine commercial terms.

Is BT Group subsidizing Plusnet in that way? Is that how its "price-conscious" budget subsidiary can offer loss-leaders like free broadband? Guaranteeing that it can undercut BT competitors? Securing ever greater market share for the Group? Its customer-base up 17% on 2014; and up a further 16% on 2013?

Damned if I know. Perhaps if Plusnet was open in its financial reporting we wouldn't be wondering...

Of course cross-subsidizing loss-making operations within a trading group is nothing unusual. The dirty digger, Rupert Murdoch and his financiers at News International, ran The Times newspaper at a loss for many years.

Selling The Thunderer for just 10p a copy on weekdays. A cover price well below cost. A ruse securing it much greater market-share. Hoping eventually to drive rival broadsheets out of business altogether. Only when the MMC/CMA/OFT finally stepped-in, ordering those cross-subsidies to cease, did the newspaper market return to normal.

---

As an aside, we learn that BT Group has recent form of its own here; engaging in other efforts at "inappropriate" accounting. In the case documented here and here it was hoping to artificially shift costs of acquiring mobile operator EE onto its Openreach subsidiary. "Inappropriate" accounting that would ultimately increase the cost of network access for all its rivals.

In reference to www.ft.com/cms/s/0/c37a1608-8d11-11e5-94a4-639039952d45.html:

The telecoms regulator has labelled �inappropriate� a move by BT to bill part of the cost related to its £12.5bn acquisition of EE to its Openreach division, which controls the national broadband network.
..
BT�s rivals Sky, TalkTalk and Vodafone are concerned that the telecoms group can move unnecessary costs to Openreach � even if this is a consequence of complex accounts � which it could then attempt to recoup by charging them more to use the telecoms network.

These companies have called for Openreach to be formally separated from BT to provide greater transparency � a proposal that BT has strongly rejected.

The amount of EE acquisition costs charged to Openreach is only £1.7m, according to a consultation by Ofcom into the cost of so-called �leased lines� for business connectivity. A wider £27m cost relating to the EE takeover will be considered in later consultations.

But rivals said that the principle of accounting attribution was the same regardless of the amount. The fact that the charge was from costs relating to the takeover of a rival group that strengthens BT has added to their concern.

�This is just another demonstration of the conflict of interest that BT�s ownership of Openreach creates,� said one telecoms executive. �Regardless of the amount, money from Openreach shouldn�t be diverted to pay for the other activities of BT Group, when it should be reinvested in improving the network. It underlines why we need an independent Openreach.�

Ofcom said: �We consider that BT�s EE acquisition costs are incurred as a result of the activities associated with the acquisition of EE. However, BT attributes these costs across all UK lines of business, including, for example, Openreach and BT Wholesale to which we do not consider these costs relate.�

The regulator said that this was not �consistent with the regulatory accounting principle of causality and therefore we consider this attribution inappropriate�.
..
BT is required by Ofcom to separate costs related to regulated services such as Openreach from other divisions. Openreach is run as a functionally separate part of BT, which allows the company to provide access to its network and services to rivals on the same terms as BT�s retail arm.
..
Another telecoms executive added: �This provides further evidence that Openreach needs to be structurally separated from BT, or at the very least, provide greater financial transparency.�

Indeed.

---

Edited by deleted (Mon 23-Nov-15 23:24:39)

In reply to a post by edwincluck:

What this means, in particular, is that it disguises any subsidies BT Group may be making to keep Plusnet artificially buoyant. That Reduced Disclosure Framework could be used to conceal intra-group loans issued to Plusnet. Loans allowing Plusnet to continue trading when it may otherwise not be solvent.

I'm not an accountant either, but I do know that any loans/capital injection deemed as such would not affect the P&L. Turnover/Profit is exclusive to a company's capital. (An intra-group loans would not be classed as an income).

Unless they are creating fictitious sales out of the PlusNET company, and potentially offsetting the taxable profit by creating management/administrative costs intra-group then, but that would cost time/effort and carries unnecessary risk?

I just find out which ISP Bob is with and stay miles away from them.