BT opens up by doing the splits

BT has announced plans to split itself into separate divisions as part of a radical restructuring of its business.

The telecoms giant is also planning an overhaul of its indirect channel operation, due to be unveiled next week.

It 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 the plans were a "significant step" toward achieving greater transparency.

Peter Bonfield, chief executive at BT, said the move would tighten the company's focus. "It 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," he said.

BT plans to complete the split by the end of this year. The retail business will provide phone services to residential customers, including mobile and e-commerce services, and the wholesale operation will offer network services to other phone operators and service providers.

The company will also create four high-growth oriented businesses, grouped by market sector rather than by geography, called Ignite, BTopenworld, Wireless and Yell. Ignite is a broadband IP service provider aimed at 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 offering broadband services.

BT Wireless will focus on mobile data and next-generation services and Yell, formerly Yellow Pages, will be an international directories and e-commerce business.

BT also said it will invest £4bn on building the backbone of its network in Europe.