BT to restructure Global Services after 'challenging year'

The logo of BT Group

In the aftermath of the Italian accounting scandal, BT has replaced its Global Services CEO Luis Alvarez with Bass Burger, while also announcing a two-year restructuring "to create a simpler and leaner operating model".

BT chief executive and former finance chief Gavin Patterson and Tony Chanmugam have agreed to forefit their bonuses over the scandal however both men would not have accepted a bonus is BT had approved one.

The news emerged as the telecoms giant reported a 19 per cent fall in annual profits, to two point four billion pounds.

Ball also pointed to issues in the previous year including a £42m fine imposed on BT-owned Openreach, the largest ever imposed by the regulator, for issues including blaming broadband installation delays on factors beyond its control when this was not the case. Not much of a surprise - the Italian accounting fiasco had been expected to eat up around £500m in free cash in 2016/2017 and a further £500m in 2017/18.

BT today announced that Bas Burger is to become chief exec of Global Services from 1 June, replacing Luis Alvarez who has made a decision to leave BT after almost five years as chief exec, Global Services and 18 years with the company.

Citing these issues, BT's Remuneration Committee have opted not to dish out a bonus to Patterson, meaning his total pay packet has shrivelled from £5.28m to £1.34m year on year.

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The committee had made "a number of hard decisions this year in light of these circumstances and exercised its discretion accordingly", Ball said.

The telecoms firm is looking to simplify its Global Services operations and it said most of the posts will be going into back-office and managerial sectors.

"We take these issues extremely seriously and are putting in place new measures, controls and people to prevent them happening again".

BT said its fibre broadband network now passes 26.5m premises, while EE's 4G coverage reaches 80% of the UK's landmass.

Although shareholders will receive a 10% higher final dividend of 10.55p, future dividend growth outlook has been reduced below previously forecasted 10%. "An Ofcom fine of £42m and having to repay £300m to rivals doesn't help matters".

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