Job cuts and even a complete restructuring of the business are all on the cards as chief executive Peter Bonfield tries to find a way out of the increasingly shark-infested waters into which BT has sailed.
Speculation has been mounting that BT's rivals, led by Deutsche Telekom, are gearing up for a takeover bid. Given that BT's market capitalisation is now less than half that of rival Vodafone Airtouch - £62 billion compared to £161 billion - this once unthinkable thought has gained credence by the day.
All such crises reflect long-term uncertainty about BT's future strategy and role. Until recently BT could do no wrong in the City. In the past four weeks its share price has fallen by a third: according to BT's internal calculations, its shares should be worth around £20 each, not £11.50.
Now it is seen as holding onto its past: dragging its feet over giving rivals access to its network, reluctant to bow to calls for cheaper internet access, and sluggish on the introduction of new asymmetric digital subscriber line (ADSL) technology for fear of cannibalising its lucrative leased line revenues.
In addition, BT's strategy for expansion into Europe by taking minority stakes in a number of operators seems timid compared to mega-deals such as Vodafone-Mannesmann. BT's tactics are no longer aggressive enough.
Concert with sour notes
Worst of all, BT is widely perceived as being outmanoeuvred by smaller and more nimble players. Management is seen as top heavy, and to have lost control of the big picture strategy while concentrating on its disappointing Concert joint venture with AT&T.
Last month, the transatlantic pair admitted Concert's first year's turnover and profit will be $7 billion (£4.2bn) and $700 million (£424m) respectively - 30 per cent below expectations.
At the very least, a shake-up of senior management is overdue. Spinning off of core units is another possibility.
UK managing director Bill Cockburn is the most likely candidate to be moved on. If BT is restructured into more customer-facing units, his role will become irrelevant. BT is annoyed at the lack of recognition for the success of its new businesses in the mobile and internet arena, and it's concerned the soaring value of these operations is hidden by the way the company reports its figures, in turn depressing its share price.
"We are looking at different ways to present our figures so you can see the underlying value," said a spokesman. "Some people might see that as a step towards selling them off, but we haven't said that we will or will not do that. We consider all possibilities, but we have no immediate or long-term plans to do that."
The next step is sell-off
If showing shareholders how well the different businesses are doing is not enough, the next step could be to sell some of them - BT Cellnet and Yellow Pages being the most obvious. Experts are divided over how much money individual parts of BT might fetch. BT Cellnet is valued at around £20 billion, the internet business at between £6 billion and £9 billion, and Yellow Pages at between £2.5 billion and £5 billion.
This would have the positive consequence of allowing BT management to concentrate on its core area of consumer and business fixed line access.
But the downside is that if BT sells off these high-performing activities, it will be left with fewer stellar lines of business.
Whatever the future for BT - sliced up into a set of nimbler mini-BTs or completely absorbed by a foreign rival - the outlook for customers should be rosy. Smaller companies, for example BT's internet business, will be able to respond better to customers. And if BT is swallowed up, economies of scale could push down prices and deliver new services faster.
Despite its troubles, BT is still a formidable operation. But Bonfield needs to prove this to the financial markets soon - or risk presenting far too attractive a takeover target.
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