UPDATE2 UK Telecoms Giant BT Retail Splits Into Two Separate Businesses

In a surprise announcement BT has revealed that its UK consumer division, BT Retail, will be split into two separate businesses – BTConsumer and BTBusiness – effective from 1st September 2013. But BT will continue to report figures for BTRetail as a whole until the end of the current financial year.

The United Kingdom’s national telecoms operator believes that this will enable BT to “better serve its customers and focus even more on delivering its strategic priorities“, such as driving broadband-based consumer services and being better able to serve small and medium sized business customers (SME).

Gavin Patterson, CEO of BTRetail, said:

“BT Retail has delivered well for many years now contributing strong profits to the group. 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. John and Graham are excellent leaders and I have every confidence they will take the fight to the competition and help BT to grow in the future.”

At present BT Retail comprises four customer-facing units including 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.

Under the new plan BT Enterprises and BT Ireland will be merged into BT Business. Elsewhere BT Wi-fi and the consumer part of BT Ireland will transfer to BT Consumer.

The current Managing Director of BT Retail’s consumer division, John Petter, will thus become the new CEO of BT Consumer. Meanwhile the existing MD of BT Retail’s business unit, Graham Sutherland, will become the new BT Business CEO.

John Petter, BT’s new MD of Consumer, said:

“I am thrilled to be given this opportunity. BT is 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. There has never been a better time to be a consumer and we plan to up the ante in the coming years.”

Graham Sutherland, BT’s new MD of Business, added:

“Small and medium sized businesses are the life blood of the economy and they are central to our plans. BT Business has a rich set of services and the combination with BT Enterprises and BT Ireland, both fantastic businesses, will help us to grow. It is a pleasure to take on this role at such an exciting time.”

The move is not expected to result in any major changes to BT Consumer’s (formerly BT Retail) line-up of domestic focused broadband and phone packages (the launch of BTSport and related changes have only just happened so it wouldn’t make sense to refresh again just yet), although we wouldn’t be surprised if the new business division did something different. However we are attempting to clarify what the practical differences will be.

UPDATE 12:16pm

A spokesperson for BT has advised us that “there won’t be any impact on products or services we deliver to customers in the near future“, although they also somewhat hinted that this could change after 1st September 2013 split has had time to settle. As above though, we suspect that any changes that do emerge might initially be focused more on building up their business products.

Frankly we’re still not quite sure what to make of this move and how much practical benefit it might bring to split into two businesses.