BT's new boss slams licence payout

Sir Christopher Bland: admired for his political skills

British Telecom should have avoided the telephone airwaves battle which saddled winners with massive debts, the firm's new chief has said.

When asked by a newspaper whether BT should have bid for a licence to run third generation (3G) mobile phones, Sir Christopher Bland, appointed chairman on Thursday said: "Certainly not."

BT spent £4bn on its 3G licence, part of an 18-month spending spree with left the firm with £30bn of borrowings, and stoked the investor criticism which led to the resignation of Sir Christopher's predecessor, Sir Iain Vallance.

But Sir Christopher, speaking in an interview with the Independent on Sunday, said that "hindsight is a wonderful thing"

Future shake-up?

He also left a question mark over the future of Sir Peter Bonfield, BT's chief executive, who many City analysts believe should have quit as well, or instead of, Sir Iain Vallance.

"[Sir Peter] and I have complementary skills," Sir Christopher told the newspaper.

"I hope that we will work well together. If we don't, then neither of us knows the answer."

According to the Mail on Sunday, BT has hired a team of recruitment consultants to seek a successor to Sir Peter.

The team was stood down when last week's change in chairmanship was agreed, the paper said.

Political skills

Commentators see one of Sir Christopher's main roles at BT as in negotiating some kind of concessions from the UK government to offset the £4bn licence cost.

Sir Christopher's political skills, refined during his spell as chairman of the BBC, are believed to have been key to the BT board supporting his appointment.

While ministers have refused to renegotiate the 3G licences awarded to BT and four other operators, the government is reported to be investigating alternative ways of lightening the firms' financial burden.

These could include easing competition restrictions to allow operators greater ability to share networks, so reducing the costs of installing infrastructure.

European commissioners, fearful that Europe will fall behind in the global technology race, has suggested state aid for the operators.