BT has achieved much operationally over
the past year. We have continued to introduce innovative products
and services, such as Genie, our mobile internet portal; we have
continued to develop our high-speed broadband network; and we
have continued to compete vigorously.
Now, we are moving swiftly to take further action that will transform
|| addresses the debt built
up through pursuing our strategy;
||accepts the realities of the
||continues the process of separation
by lines of business;
||creates two substantial listed
|| keeps both companies focused
on growth opportunities.
In April 2000, we began a radical restructuring
of BT. We grouped some of our activities by market sector, rather
than by geography, to create BT Wireless, BT Ignite, BTopenworld
and Yell, four businesses with potential for high growth.
In October 2000, we split management of our UK communications
services between BT Retail and BT Wholesale.
And, in November 2000, we announced our intention of seeking separate
listings via initial public offerings for BT Wireless and Yell.
We also stated our target of reducing our net debt by at least
£10 billion by the end of 2001.
Since then, stock market volatility throughout the world, particularly
in the telecommunications sector, has led us to reconsider whether
selling off equity in parts of the business via the IPO route
represents the best way ahead for the company.
As a result, we announced in May our intention to demerge BT Wireless
and so create two substantial companies, BT
Wireless and Future BT.
restructuring represents a major task for BT, but I’m confident
that we can and will deliver. We’re tackling the issues
that need to be tackled and we’re moving forward."
We plan for BT Wireless to include all of our fully-owned wireless
assets in the UK and Europe, and Genie, one of Europe’s
leading mobile internet portals. It should be a high-growth business,
strongly positioned to develop third-generation services by taking
advantage of its leadership in mobile data. It will be an independent
wireless operator in a market which is consolidating.
Future BT will combine four separately managed businesses, BT
Retail, BT Wholesale, BTopenworld and BT Ignite to form a focused
European network and retail group concentrating on voice and data
services. Its aim is to create value based on service excellence,
its brand leadership, its large scale networks and its existing
customer base. It will also develop and market new, higher value
broadband and internet products and services.
Your investment in BT will, therefore, provide ownership of two
strong and separately quoted businesses, and the flexibility that
gives shareholders. Although both companies are expected to be
major components of the FTSE 100, they will have contrasting financial
profiles: BT Wireless, high growth; and Future BT, well-established
and cash generative.
The separation into distinct businesses gives our management teams
greater focus and accountability. It enables them to focus hard
on productivity and their own customer segments, and it gives
each business more flexibility for forging partnerships and strategic
alliances. We are already gaining distinct advantages from having
our businesses up and running as separate units. The action we
are planning now will enable us to build on this.
The greater transparency of the businesses should also help investors
improve their understanding of each one. They can assess the dynamics,
opportunities and contrasting financial profiles of each business
– and this better enables them to attribute value to each.
This restructuring represents a major task for BT, but I’m
confident that we can and will deliver. We’re tackling the
issues that need to be tackled and we’re moving forward.
Sir Peter Bonfield CBE Chief
22 May 2001