BT has announced that its Retail division, which focuses on small firms and consumers, will be split into two units from September.
The split will see two new divisions emerge, BT Consumer and BT Business, in order to help give the firm the ability to focus on the needs of customers in the two areas.
The former division chiefs of the business and consumer division from within BT Retail will now head up the separate divisions. John Petter will be BT Consumer chief executive and Graham Sutherland will be BT Business chief executive.
Sutherland said creating a separate business unit for the SME market would help more firms benefit form BT’s services
“Small and medium-sized businesses are the lifeblood of the economy and they are central to our plans,” he said. “BT Business has a rich set of services and the combination with BT Enterprises and BT Ireland – both fantastic businesses – will help us to grow.”
Both units will report to the current chief executive of BT Retail, Gavin Patterson, who will become BT’s group chief executive when he replaces Ian Livingston in September. Livingston will then take a role in government.
Patterson said splitting the divisions up was a vital next stage in BT’s growth, especially as it seeks to take on Sky in the sports market. “It is time for the business to be split in two, given the intensely competitive nature of the consumer market and our strong ambitions in the business space,” he said.
Analysys Mason principal analyst, Rupert Wood, told V3 the split made sense for BT as now more than ever the market was able to offer differentiated products.
“Telcos in general have historically found it difficult to position SME businesses, and have frequently merged and demerged SME-facing business with consumer-facing business,” he said.
"This time the split makes sense because the set of services that depend upon the common business of connectivity and voice are truly coming of age. BT Retail has become more service-oriented, and it’s at the service layer that SME and consumer diverge.”
The announcement comes after BT last week posted first quarter 2013 profits of £449m – down 16 percent on the same period last year – due to several changes in its financial structures and pension payments, but it added 197,000 new fibre customers in the period.
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