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BT's new broom turns out to be carving knife: Retail wing sliced in half

Two-headed beast sent into 'four-way tussle with Sky, Virgin and TalkTalk'

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BT's soon-to-be new boss Gavin Patterson made the first big management decision of his reign today - and split the telecom giant's retail division into two distinct wings: consumer and business.

Patterson, who will formally take over from outgoing chief exec Ian Livingston as BT's chief exec in September, hopes the slice'n'dice will help his biz outplay its rivals.

"It is time however 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," Patterson said.

The split will take effect just as Patterson, who currently heads up the retail operation, settles into his new job.

The two separate divisions will be labelled "Consumer" and "Business". John Petter, who is the managing director of the consumer unit within retail, will run the consumer biz, while business unit MD Graham Sutherland will become CEO of the BT business wing.

BT added that the decision to break up its retail division, which last week reported flat quarterly revenue growth, will help it "better serve its customers and focus even more on delivering its strategic priorities".

The company is betting big on television with its sports channel launching later this week, which will compete with BSkyB's offerings. It explained:

BT Retail currently comprises four customer-facing units. These are BT Consumer, BT Business (which supplies SMEs), BT Enterprises (which consists of BT Conferencing, BT Payphones, BT Directories, BT Fleet, BT Wi-fi, BT Redcare, BT Expedite and Fresca, and BT Tikit) and BT Ireland.

BT Enterprises and BT Ireland will merge with BT Business to form the new BT Business division while BT Wi-fi and the consumer part of BT Ireland will transfer to BT Consumer.

Petter said the one-time national telco was "in a four-way tussle with Sky, Virgin and TalkTalk for broadband customers and we are at the start of an exciting journey with BT Sport".

He added that BT was planning to "up the ante in the coming years".

It will be interesting to see if BT undergoes more management rejigs once Patterson becomes chief. Its wholesale division, for example, has been troubled for many quarters now. ®

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