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EE to retain brand, network and shops, says BT

BT has announced a new organisational structure to come into effect in April, following its acquisition of mobile operator EE

EE will operate as a sixth standalone line of business inside the BT Group, and will retain control of its branding, network assets and retail stores, BT has revealed.

Following the closure of its £12.5bn acquisition of EE on 29 January 2016, The telco announced details of its new organisational structure on 1 February, alongside third quarter results that saw headline group revenue rise 3% to £4.6bn, while adjusted pre-tax profit grew 14% to £928m.

Under BT’s new structure – which comes into effect from April 2016 – EE, led by new CEO Marc Allera, will supply advanced mobile services, broadband and TV. It will remain largely consumer-focused, although it will continue to deliver the controversial Emergency Services Network contract awarded in 2015.

EE’s business operations are to be hived off into a new business unit, BT Business and Public Sector unit, which replaces BT Business.

BT Business and Public Sector, which will also comprise of those parts of BT Global Services that are UK focused, is expected to have sales of around £5bn per annum, and will be led by Graham Sutherland.

BT will also expand its BT Wholesale division, renaming it BT Wholesale and Ventures, to incorporate EE’s MVNO business, as well as some specialist businesses such as Fleet, Payphones and Directories. It will be led by Gerry McQuade, who was previously chief sales and marketing officer of EE’s business division.

Read more about the acquisition of EE

  • BT and EE were first linked in November 2014, when EE’s owners revealed they wanted to divest just days after O2 also put itself up for sale.
  • Following months of talks, BT announced it had reached a definitive agreement with EE to acquire it for £12.5bn in February 2015.
  • In January 2016, the deal cleared its final hurdle after the acquisition got the go-ahead from the Competition and Markets Authority.

Meanwhile, BT Consumer, under John Petter, will remain focused on consumer broadband, telephony and mobile; BT Global Services, under Luis Alvarez, will continue to address multinational enterprises, financial services organisations and public sector bodies worldwide; and with its fate still to be decided by Ofcom, Openreach will remain unchanged for now.

“We will operate a multi-brand strategy with UK customers being able to choose a mix of BT, EE or Plusnet services, depending on which suit them best,” said BT CEO Gavin Patterson.

“The acquisition enables us to offer great value bundles of services, and customers are set to be the winners as we compete for their business.

These six divisions will be supported by Technology, Services and Operations (TSO), which currently manages BT’s core networks in the UK and abroad, its IT platforms, and its substantial research and development operation. A new IT and mobile business unit in TSO will be led by EE’s chief technology officer, Fotis Karonis.

Sustainable, profitable growth

With underlying revenues – excluding transit – rising at the fastest rate since 2009, BT also reflected on a strong set of results, with good numbers across the board. BT also said it was making good progress towards its goal of “sustainable, profitable growth”.

Patterson said that BT Consumer in particular had a standout quarter, growing its line base for the first time in over a decade and capturing 71% of new broadband customers during the period. The unit grew sales by 11% in the October to December quarter.

“Customers like what we’re offering, whether that’s superfast broadband, Champions League football, or mobile data bundles,” he said.

Patterson also pointed to growth at Openreach, with more than half a million premises having taken up a broadband service over its network in the last three months of 2015, via dozens of service providers.

He reiterated BT’s wider goals to take fibre-to-the-cabinet (FTTC) services to 95% of the country by the end of 2017. He also said trials of G.fast – the next-generation technology that is potentially capable of extending speeds over copper last mile networks to well over 100Mbps – were going well.

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