Jeremy Warner: BT hammered by warning

Outlook Ian Livingston seems to have been delivered something of a hospital pass by his predecessor as chief executive of British Telecom, Ben Verwaayen. Even since he arrived in the job last summer, it has been one disappointment after another. None of this is the fault of Mr Livingston, who by most accounts ran the retail arm of BT for which he was previously responsible rather well.

Rather, the problems lie in global services, a business developed by Mr Verwaayen which he promised would eventually deliver a whole new wave of revenues and profits for BT. This it is stubbornly refusing to do. The boss of global services is being sacked for his failure to deliver cost cuts as commanded, but it seems unlikely this will halt the run of bad news. Inevit-ably, the downturn will bite home in the core domestic telecoms business, and with the collapse in stock markets, the pension fund is again in need of extra funding. That will mean even less of dwindling cash flows for dividends. Mr Verwaayen seems to have left in the nick of time.