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By | Kat Hall 1st February 2016 11:31

BT airs out new business structure as it digests EE

Points to Openreach and tells Ofcom it is already at 'arm's length'

BT is to create a Frankenstein business unit on April Fools' Day worth £5bn out of old parts of BT Global Services focused on the UK, BT Business and EE's newly acquired business unit, it announced during "record" third quarter financial results.

The major restructure plans come days after the outfit completed its £12.5bn gobble of EE. BT said new company will be a "digital champion for the UK as a whole" claiming it will "continue to be a significant infrastructure investor building the fastest, most connected and most reliable networks and providing our customers with truly seamless connectivity."

Meanwhile, the rest of EE will retain its branding and focus on the consumer market, its network and high street stores. This division will also be responsible for the controversial Emergency Services Network contract.

Under the new arrangement it will have six lines of business: two business focused, two consumer-oriented, and two to flog wholesale services to the industry.

The company said the re-org will allow its "broadly flat" performing Global Services outsourcing division to "focus on serving multinational companies and major customers outside the UK". Many will read that as a sign of it getting ready sell the non-UK entity and concentrate on Blighty.

Other changes include EE’s mobile virtual network operations (MVNO) and specialist businesses, such as BT Fleet, moving into BT Wholesale. EE’s technology team will move across to join BT Technology, Service & Operations, it said.

The former state monopoly announced the new division in its third-quarter financials - its "best result for more than seven years" according to head honcho Gavin Patterson.

Profit before tax soared by 24 per cent to £862m on revenue up three per cent to £4.6bn compared with the same three months last year.

Chief executive Gavin Patterson said: "BT Consumer had a stand-out quarter, increasing its overall line base for the first time in well over a decade and capturing 71 per cent of new broadband customers."

However, BT faces a further hurdle next month as Ofcom decides whether or not to recommend hiving off its broadband division, Openreach. It is thought that at the very least Ofcom will impose greater regulation over BT's broadband dominance.

BT noted that Openreach has not been affected by the re-org and will "operate at arm’s length from the rest of BT."

The company said Openreach had connected a net 494,000 new customers, which represents a 32 per cent increase. ®

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