BT restructure: whatever happened to the customer?

BT had to take action. Its share price has been down over the last 12 months, while its debts have been mounting.

Shareholders haven't been happy. And they're unlikely to be over the moon now. Appeased, maybe. Turning cartwheels, no. But that's only half the story.

The creation of a holding company (BT Group) makes perfect sense - although bearing in mind CEO Bonfield is hoping for shareholder approval of this at its AGM in July 2001, the phrase 'too little, too late' has some resonance.

It's long been predicted that BT Wireless and Yell will be the first units to be spun off. Yet it emerged today that while that is the case, BT plans to keep hold of 75 per cent of these two, limiting the amount immediately raised.

With debts expected to reach £30bn by next spring, shareholders have the right to demand why BT hasn't taken the opportunity to go further.

The company has also announced restructuring measures (job losses) which, along with these listings and disposals, will see debt cut by around £10bn. Not bad - but again, perhaps not good enough.

A new network company, NetCo, has also been created, a company that BT also intends to list separately - selling 25 per cent.

According to Bonfield: "This action will reshape the UK telecoms market and will allow us to operate as a completely different kind of company. We're going to be faster, more flexible, focused and better able to serve our customers and reward shareholders... Although they are operationally separate, BT Retail, BTOpenworld, BT Wireless, BT Ignite and Yell will work together to create complete solutions for their customers in the wireless, internet, broadband and ecommerce areas."

Faster? More flexible? Operationally separate but working together? Separately listed but majority owned by BT? It seems a restructure designed to simplify matters may confuse customers - and that's what should really be talked about here.

Shareholders may well react with a modicum of approval but businesses have the right to feel BT should act for their good, not simply the good of shareholders. They need to know how BT thinks the changes will help them.

Platitudes about speed and flexibility are all very well, but the proof will be in the pudding. And today's restructure doesn't provide a recipe guaranteed to make those businesses' mouths water.