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Friday, 28 July, 2000, 17:23 GMT 18:23 UK
BT considers demerging network
BT considers demerging network business
British telecommunications giant BT is considering a demerger of its heavily regulated UK network business.

It is understood to have spoken informally to the telecoms regulator, Oftel, about how it might go about splitting off the network so that it can concentrate on its retail and overseas businesses.


We expect to make a decision by the end of the year

Sir Peter Bonfield, BT chief executive
BT is considering flotations to boost its share price, which has tumbled 41% this year and underperformed the sector by 30%.

It also hopes that demerging its network business would free up other interests from the burden of such heavy regulation.

But there is understood to be concern about making sure operating companies passed on enough of their profits to a shared infrastructure provider - and that there is no repeat of problems experienced with Railtrack.

Complications

BT chief executive Sir Peter Bonfield has been quoted as saying: "Demerging the wholesale business is more complicated [than demerging the retail businesses] but we expect to make a decision by the end of the year.

"It's attractive if we can agree with the government that the transmission network will be more highly regulated than the other businesses."

On Thursday, BT announced a smaller than expected fall in profits for the three months to 30 June.

But it said its debt bill would continue to rise as it invested heavily to offset the impact of growing UK competition.

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