Verwaayen ready to announce cost-cutting at BT

Click to follow
The Independent Online

BT's new chief executive, Ben Verwaayen, is set to announce a fresh wave of cost cutting measures on Monday when he gives his long-awaited first presentation on the company's future strategy.

While the measures are not expected to result in major new job losses across the business, it is thought BT Ignite, its loss-making internet services operation will be a key area of focus.

Analysts expect Mr Verwaayen to take a firm stance on Ignite, speculating that some businesses within that division could be sold or closed if their performance does not improve within a year.

The City has been waiting for Mr Verwaayen to sketch out his vision for the company ever since he took over from predecessor Sir Peter Bonfield at the beginning of February. "We expect to hear about the growing scope for cost savings and perhaps reducing capital intensity," analysts at Cazenove, one of BT's brokers, said.

The strategic update, however, takes place in BT's close period – just over a month before the telecoms giant announces its fourth quarter figures. Mr Verwaayen is also expected to outline his thoughts on the company's potential foray into broadcasting and reiterate his commitment to providing broadband services while setting out his stall on further debt reduction.

"In terms of a growth strategy for the UK business, the focus will be on the potential for broadband with management looking to build on its recent moves on the rollout of ADSL services," the Cazenove analysts said. Other City analysts speculated yesterday that further cuts to the company's capital expenditure plans, particularly at Ignite, could also be on the agenda.

But the Monday meeting will also be the first time the company's new finance director, Ian Livingston, addresses the investment community after taking up the post at the beginning of this week.