BT plans drive to stop customer drain

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Industrial Correspondent

Sir Peter Bonfield, BT's new chief executive, promised a big marketing drive to stem the loss of customers to cable companies, now running at about 50,000 customers every month. Sir Peter also warned that he would in future squeeze equipment suppliers, which include companies such as GPT, to maximise to the full BT's pounds 3bn annual capital spend.

Setting out his stall after 40 days in the job, Sir Peter went on to dispel the notion that BT would build an "information superhighway", putting fibre-optic cable into every home in the UK. His statement came only four months after BT's controversial "understanding" with Labour that if the party took power it would allow BT to enter the cable entertainment market by an agreed date in return for acceleration of its broad-band investment programme - including free connections to schools, hospitals and libraries.

Sir Peter said: "My personal view is that there will be no single national superhighway. There will be a lots of highways, knitted together and using all sorts of technology to do it.

"The idea that there will be a single fibre-optic network into every house in the UK - I think - is wrong."

He was speaking as BT announced a 13 per cent increase in pre-tax profits to pounds 2.43bn in the nine months to 31 December, mainly due to lower redundancy charges. Earnings per share in the nine months rose to 25.5p from 22.1p in the same period last year.

BT has lost 100,000 jobs over the last six years and is on target to shed a further 8,000 in the 12 months to the end of March. Sir Peter said he wanted to focus on "training, re-skilling and productivity" rather than headcount. "I have asked the folks here to look at the productivity achievements we need and then to work backwards," he said.

He warned that BT faced continued regulatory risk from the watchdog, Don Cruickshank, who is proposing to clamp down on pricing controls and to strengthen his anti-competitive powers. But Sir Peter also made it clear that, while he does not rule out a reference to the Monopolies and Mergers Commission if BT fails to agree with the regulator, he wants a less confrontational approach to regulation than the company has taken in the past.

Investment Column, page 18