BT's profit warning last week has resulted in ratings agency Standard & Poor downgrading the company's credit rating from "stable" to "negative".
Such downward ratings can be the kiss of death for major companies, seen recently by the experience of British banks forced to go cap in hand to the government after seeing their available credit drying up.
BT has spent hundreds of millions of pounds on snapping up IT services companies over the past two years, but its BT Global Services arm is not chipping in as expected.
Standard & Poor said of its new BT rating, "This action follows the release of BT's trading update indicating a weaker EBITDA (earnings before interest, taxes, depreciation and amortisation) and profit margin performance at its Global Services division for the second quarter of financial 2009."
Standard & Poor credit analyst Michael O'Brien said, "The EBITDA outlook for financial 2009, which arises as a result of a weaker-than-expected 7%-8% EBITDA margin at BT Global Services, means that our earlier expectations of annual free operating cash flow generation of about £1.5bn will likely not be met.
"In addition, pressure could manifest itself through the risk of a negative outcome from the upcoming triennial pension review, which, if unfavourable, could result in significant additional funding requirements, as in previous years."
He said this could lead to weaker credit metrics than those posted by BT at the end of the quarter ended 30 June, which were already above "long-term expectations for the ratings and do not provide rating headroom for further deterioration".
Because of its lack of cashflow, BT cancelled a £2.5bn share buyback plan in July.
BT has warned of higher capital expenditure costs and is currently trying to build a TV on demand service - BT Vision - to rival the services offered by the likes of Virgin Media and Sky.