BT Retail saves £850 million
Bonfield scores on the rebound
BT investors have given a cool reception to news that the telco's customer-facing retail division is to cut running costs by a massive £850 million.
In an interview with the Times BT Retail's CE, Pierre Danon, said the cuts were three times higher than expected.
Danon also said that BT Retail would work hard to improve its customer satisfaction which has taken a beating recently.
Despite the reassurances, BT's share price barely flickered on what should have been such confidence-boosting news.
By mid morning BT's share price was up just 2.25p at 424.25p.
Danon told the newspaper that cost savings would save £240 million this year and a further £610 million during an unspecified time in the future.
Savings would come from eradicating the "tons of inefficiencies within BT". No job cuts are planned as part of the efficiency savings, a BT spokesman confirmed.
Danon said that he was also aware of "BT's tarnished image with consumers" but insisted that BT was on a par with other telcos and cable companies.
"Today we deliver customer satisfaction, both in business and in personal, exactly at parity with the NTL, Energis and Cable & Wirelesses of this world - no better and no worse," he said.
"We should deliver much better. My goal is that we want to be better than the competition in two years. In two years, either I am better than the cable companies or I quit," he said.
Today's interview appears to mark the beginning of a charm offensive by BT with the company unveiling a new ad campaign tomorrow.
Having sold off vast chunks of the company and embarked on a £5.9 billion rights issue all in the aid of cutting its debt mountain, the company is now seeking to improve its standing and image.
Having been battered for so long it no doubt feels it needs to drum up some confidence among investors and the business community. By 'eck - that'll be some task. ®