British Telecom close to announcing revamp
By Increasing investor crit | 08 Nov 2000
Analysts hope that the company will separate its wholesale operations from its other business units as part of this revamping plan, which may be announced on Thursday when the company declares its second-quarter results. Expectations about the division had begun last month, when BT replaced its finance director of 11 years with Philip Hampton, who was responsible for the splitting up of British Gas. Operationally, the division of the company requires regulatory approval.
- The company may set up a holding company to link the heavily regulated wholesale division and other businesses, which include retail telephone services, Btopenworld – its internet subsidiary and Ignite, which sells broadband to corporations. Analysts are of the opinion that the separation would allow the company to grow its nascent mobile and internet operations more aggressively.
The separation would also allow the company to place a major portion of its huge debt with the wholesale division, which traditionally has been the company’s cash cow. The company may also resort to sale of under-performing assets to reduce its debt burden.
The company may also float 25 per cent of its mobile phone unit at a later date. Earlier this year, British Telecom said it would spin off Yell, its electronic directory, in an initial public offering.
While analysts and investors welcomed any such move, according to some of them these moves may be too little, too late.
.webp)
