Originally Posted by PaulLFC:
“BT will be paying £279 million a year from 2015 (since they already paid the £60 million deposit), so this would be what they'd have to charge their customers extra, to cover the whole amount if:
- Every customer paid the extra charge
- They don't cover any of it with another income source
- They don't take a part loss on it to attract customers.
Basically, it has zero chance of happening, but here are the numbers anyway:
1 million paying customers - extra £23.25 per month per customer
1.5 million paying customers - extra £15.50 per month per customer
2 million paying customers - extra £11.63 per month per customer
2.5 million paying customers - extra £9.30 per month per customer
3 million paying customers - extra £7.75 per month per customer
3.5 million paying customers - extra £6.64 per month per customer
4 million paying customers - extra £5.81 per month per customer
If those numbers say anything to me it's that BT will have to find a way of covering part of the cost somehow, because while they do apparently have around 4 million customers already across all platforms that they could charge a fiver a month to and cover most of the cost, not everyone is going to pay it - so they'll need another source of revenue, or to take a loss.”
Yeah, the 2 points you've made (in bold) are key here. Firstly, they'll potentially use rises in some of their other products to cover some of the costs. Plus with a lot of their services (where the cost to BT is reducing) keeping the price the same actually makes BT more money.
Plus secondly, they may run this as a loss leader while they build a foothold in the market and build up subscriptions (Sky did this for years as they tried to establish themselves). If BT did this, they still come in with £billions in profit even if it was reduced!!!