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Monday, 9 October, 2000, 10:12 GMT 11:12 UK
BT gears up for 'split'
BT engineer
Speculation is growing that British Telecom is set to announce a break-up of the group.

The speculation follows this year's slump in the company's share price and the appointment on Friday of a new finance director, Philip Hampton.

Mr Hampton was responsible for splitting British Gas in two and his appointment was largely interpreted by stock markets as heralding an imminent announcement about a split.

According to some Sunday newspapers, the group could make an announcement as early as next month. The reports sent the company's share price higher on Monday morning.

In early trade, shares in BT were 26.5 pence higher at 766.5 pence

Strategic thinking

British Telecom is currently carrying out a strategic review of its business.

Reports in the Sunday Business and Sunday Times said the company plans to separate its regulated domestic business from its internet and mobile arms.

Earlier this year, BT had confirmed that it planned to float its phone directories service, Yellow Pages, which has now taken on the name of its internet subsidiary, Yell.

So far BT has played down speculation that more change is imminent.

"We have always said that as part of the continuing review, we are, yes, looking at disposals and IPOs ( flotations)," a BT spokeswoman said.

"The review is ongoing. The existing finance director will stay until 7 December to see it through," she added.

Infighting

Stiff competition and the huge costs of securing next generation mobile phone licences have contributed to a slump in BT's profits this year.

Last week, rumours of boardroom infighting prompted BT to issue a denial that its chairman, Sir Iain Vallance, was about to leave.

Many shareholders are thought to blame him for the falling share price.

Similarly, the former finance director Robert Brace was widely seen as a brake on flotations.

In contrast, Philip Hampton is seen as instrumental in the restructuring of British Steel in the early 1990s in his capacity as finance director.

"He is the perfect person for the rapid but painful reorganisation processes BT needs to make itself competitive," Steve Trowbridge, analyst at SG Securities said.

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See also:

02 Oct 00 | Business
BT's Vallance to 'stay'
18 May 00 | Business
Competition hits BT
02 Oct 00 | Business
BT under fire on fast web
28 Jun 00 | Business
BT to float Yell this year
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