BT says it is splitting up its BT Retail unit into two to better serve business customers.

The split will see the creation of the the BT Consumer and BT Business units, with the split taking effect from September.

BT says the split will enable it to "better serve its customers and focus even more on delivering its strategic priorities". These include "driving broadband-based consumer services" and "being the brand for business for UK SMEs".

The CEO of BT Consumer will be John Petter, currently managing director of the consumer unit within BT Retail. The CEO of BT Business will be Graham Sutherland, who is, incidentally, currently managing director of the business unit within BT Retail.

Both currently report to BT Retail CEO Gavin Patterson and they will continue to do so when he takes over from Ian Livingston as BT group chief executive in September. Both will join BT's operating committee on 1 September.

BT Retail currently comprises four customer-facing units. These are BT Consumer, BT Business (which supplies SMEs), BT Enterprises (which consists of BT Conferencing, BT Payphones, BT Directories, BT Fleet, BT WiFi, BT Redcare, BT Expedite and Fresca, and BT Tikit) and BT Ireland.

Most of BT Enterprises and BT Ireland will merge with BT Business to form the new BT Business division, while BT WiFi and the consumer part of BT Ireland will transfer to BT Consumer.

Patterson said: "BT Retail has delivered well for many years now contributing strong profits to the group. It is time however for the business to be split into two given the intensely competitive nature of the consumer market and our strong ambitions in the business space."

Sutherland said: "Small- and medium-sized businesses are the life blood of the economy and they are central to our plans. BT Business has a rich set of services and the combination with BT Enterprises will help us to grow."