BT splits to strengthen focus

In a move welcomed by industry watchdogs, BT has announced plans to split itself into separate divisions as part of a radical restructuring of its business.

The telecoms group will split its UK fixed-line business into wholesale and retail divisions and will also regroup its international operations into four "high growth businesses".

BT said the revamp will enable shareholders and analysts to have a better understanding of the company, and will lead to the possible listing of divisions on the stock market.

Telecoms watchdog Oftel said in a statement that it welcomes BT's restructuring plans. "The proposals by BT are a significant step to create a structure where there will be greater transparency."

Peter Bonfield, chief executive at BT, said: "This restructuring will strengthen our position in the key growth areas of broadband, consumer internet and mobile and will help us to realise our aggressive plans to lead the next wave of the communications revolution."

"It will tighten our operational focus and enhance transparency for investors," he added.

BT plans to split its UK land-line phone business into wholesale and retail divisions by the end of this year. The retail business will provide phone services to residential customers, including mobile and ecommerce services, and the wholesale operation will offer network services to other phone operators and service providers.

The company will also create four new divisions to be what it describes as high-growth orientated businesses. Ignite, BTopenworld, BT Wireless and Yell will operate both in the UK and internationally and will be grouped by market sector rather than geography.

Ignite is a broadband IP service provider focusing on the corporate and wholesale market. It will include BT's solutions businesses Syntegra and Syncordia, and provide the division with large scale network outsourcing. BTopenworld will be a mass market internet business with plans to offer broadband services.

BT Wireless will focus on mobile data and next generation services, and Yell, formerly known as Yellow Pages, will be an international directories and ecommerce business to be floated by the end of the year.

Also today, BT said it will adopt a more aggressive European broadband expansion strategy and will invest £4bn over the next three years on building up the backbone of its network in Europe.

In addition, the company announced that it will take 100 per cent control of Dutch mobile operator, Telfort.